Credit card fraud at its lowest in 10 years

23rd March 2012  

It appears that fraudsters are no longer targeting credit cards and are switching back to more ‘old school’ scams such as cheque and phone fraud.

Credit card fraud fell by some 7% in 2011 to £341million, the lowest amount in 10 years and part of a three-year decrease of nearly 45%, according to figures released by Financial Fraud Action UK. (You can read their full summary here on the FFA UK website).

Online banking fraud also fell by 24% to £35.4million in 2011, despite a massive increase in phishing attempts. It seems that account holders have finally got the message and are no longer responding to attempts to garner their details illegally. This may go some way to convince sceptics who are still nervous about the security of online banking, and that it is actually a safe way to manage your financial affairs.

Meanwhile, cheque fraud went up by 17% (does anyone actually still use cheques any more? Apparently so…) and real old style telephone banking fraud went up by approximately 30%, with victims being convinced by a friendly voice at the other end of the phone to give up their PIN number and banking details.

Stay vigilant, the credit card fraudsters are still out there somewhere

But the police have warned that the drop in credit card fraud should not encourage customers to be complacent. While card identity theft dropped by 41% last year and fraud from skimmed or cloned cards fell by 24%, fraudulent transactions on lost or stolen credit cards crept up by 13%.

The number of cards going missing in the post also accounted for a rise of 34% in card fraud, so perhaps the real weak link in the method of physical delivery. Maybe the credit card issuers should look to use secure courier services.

Read our comprehensive guide on how to Avoid Credit Card Fraud.

New technology has also made it much harder for fraudsters to scam credit cards. The updating of chip and PIN cards has had a significant effect in reducing credit card fraud, as has the sharing of information between financial institutions and the police. Cards with ‘updated integrated circuit card verification value’ are nothing new, but they have played a key role in cutting back on the amount of credit card fraud perpetrated in the UK since 2008.

The introduction of ‘dynamic data authentication’ cards that make each transaction unique has also made it much more difficult for fraudsters to simply copy details and added to the general decline in fraud.

But there is still a need for credit card users to be vigilant, and to immediately report anything that seems suspicious. ‘Skimmers’ are still being found in ATM machines across the country, although users are now much more aware of what to look out for and to protect their PIN number from prying eyes.

The number of opportunities left open for fraudsters are shrinking as the public becomes much more conscious of the potential risks. This is the third year in a row that credit card fraud has fallen, and with continued development of smart technology, a predisposition for customers to be naturally suspicious and better fraud protection by the lenders, 2012 could make that drop in fraud figures four years in a row.


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