According the NFA, total fraud losses on UK cards fell to £169.8 million between January and June 2011 – a 9% reduction compared with losses in the first half of 2010. This half-year total, adds the authority, is the lowest for eleven years and also the third consecutive decrease. It's not all good news, however, as lost and stolen card fraud losses rose slightly, increasing by £4.4 million.
Online banking fraud losses totalled £16.9 million during January to June 2011 – a 32% drop on the 2010 half-year figure, something that the NFA attributes to a number of factors, including increased customer awareness of computer security combined with banks’ use of fraud detection software.
However, phone banking fraud losses rose to £8.6 million (a 48%) during January to June 2011. As with card fraud, the NFA says that criminals are focusing on the straightforward crime of duping a customer into believing they are dealing with a bank or police representative and getting them to disclose their financial security details – such as PINs, passwords and login details - which the criminal then uses to access the customer’s bank account over the phone.
The NFA adds that it estimates that fraud in all its guises costs the UK more than £38 billion a year - card and banking fraud accounts for only 1.2% figure. Furthermore, in the UK - unlike many other countries outside Europe - innocent victims of any type of payment fraud on their debit or credit card or account are protected and should not suffer any financial loss.
DCI Paul Barnard, head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), said that losses are appreciably lower than they were a few years ago and everyone involved in tackling fraud has reason to be encouraged by this – and that includes bank customers who, as their own front-line of defence, have certainly played their part too.
“However, there has been an increase in old fashioned scams – criminals using distraction techniques and social engineering methods to get hold of people’s cards or phone banking details. We are urging everyone to be on their guard. Your bank or the police will never cold call you or email you and ask you for your login details, cards or PINs. If anyone does, they are probably a criminal, so hang up the phone or delete the email”, he said.
Commenting on the fraud figures, Martin Warwick, a fraud expert at analytics firm FICO - which claims to protect 90% of UK cardholders from fraud - said that they confirm that the various security measures promoted by the industry in recent years are making a difference.
“Card fraud is declining as banks and card issuers are using more analytics-based fraud systems and increasing the sophistication of their fraud management operations. The introduction of Chip-and-PIN here and abroad has been a success story and banks are gradually using more verification software for online shopping”, he said.
But, he added, the fraud problem won’t go away, as criminals will try harder to find new ways as well as resorting to old methods for scams and banks will be required to keep pace with the new developments and lock down the old gaps.