Plastic card fraud losses totalled £292.6 million in the UK during 2000, a rise of 55% on the previous year according to the Association for Payment Clearing Services (Apacs).
The Apacs statistics show counterfeit card fraud more than doubling year-on-year, representing £102.8 million in losses. In contrast Internet card fraud rose by £2 million to £7 million, a slower rate of growth than almost all other forms of card crime.
The UK banking industry is committed to a nationwide roll-out of chip cards, aimed principaly at preventing criminals from skiming data from the mag-stripe of one card onto a cloned card. By the end of 2002, most of the bank-owned infrastructure (cards, terminals and cash machines) in the UK will have been upgraded, and it is hoped that the upgrade of retailer-owned terminals will also be progressed rapidly.
David Cooper, chairman of the Apacs plastic fraud prevention forum, says the full benefits of the chip card programme won't be felt for many years yet. He says that banks and retailers are actively assessing the use of PINs (personal identification numbers) at the point-of-sale, and expect to make a decision in the first half of this year on whether to introduce this additional form of identification in the future.
Other types of card crime are also on the increase. Card-not-present fraud losses on transactions made over the phone, by mail order or the Internet also nearly doubled in 2000. However, estimated losses from Internet and telemarketing transactions remain modest at around £7 million.
In order to combat card-not-present fraud, the UK banking industry is introducing an automated address and card verification system, rolling out from April 2001 with priority being given to the UK’s most fraud-prone merchants. The system will make it possible for merchants to verify the billing address of cardholders and also to cross-check coded numbers on cards. It is expected that these measures will bring significant reductions in card-not-present fraud losses by the end of this year, says Apacs.