APACS reports decline in card fraud

March 23, 2007

Card fraud losses fell by three per cent in the past year, says UK payments association APACS. In the past two years, card fraud has fallen by nearly £80 million to £428 million. There has been a 13 per cent decline in UK domestic fraud and a reduction of more than £45 million in mail non receipt and lost and stolen fraud.

While chip and PIN has made it more difficult for fraudsters to commit card fraud, with a £146.7 million decline in losses to retailers in the last two years, cloning has increased by three per cent, as fraudsters create counterfeit magnetic stripe cards that can be used in countries that are not using chip and PIN. Card not present fraud has increased by 16 per cent, accounting for half of all card fraud losses.

Sandra Quinn, director of communications at APACS, says: 'These figures clearly show that there is no one-size-fits-all approach to dealing with fraud. Chip and PIN has had a hugely positive effect on fraud losses over the counter in UK shops and stores, but we are seeing more fraud on transactions that do not use chip and PIN – such as over the internet and phone, by mail order and abroad in countries that have not yet fully upgraded to chip and PIN. '

There are several measures in place to deal with card not present and online fraud, which has increased by more than £10 million in the space of a year. These measures include automated cardholder address verification and card security code systems. There is also work underway to build on chip and PIN to help address fraud in online, phone and other non face to face transactions. APACS is also working to establish industry wide fraud figures to increase transparency across all fraud types.