Cases of credit card fraud have dramatically increased in London in the past 12 months, with more than two million, over one in three, Londoners now having fallen victim.

According to the life assistance company, CPP's annual Card Fraud Index - which identifies fraud hotspots across the UK - credit card fraud in the capital has increased by 10 per cent in the last year. Thirty-eight per cent of Londoners have now been affected by card fraud. This means that London tops the tables for the worst credit card fraud in the country for the second year running.

Across the UK, credit card fraud has risen on average by five per cent; with one in four Britons - which accounts for around 12 million people - have been a victim last year. This is a reflection of the desperate measures fraudsters will resort to during the current economic climate.

While London took the top spot for credit card fraud, rounding out the top five spots were Cardiff, where 34 per cent of cases were noted. Glasgow and Manchester took third and fourth places with 31 per cent and 29 per cent, respectively. Brighton took the fifth place with 27 per cent of cases, where the seaside city saw an astonishing increase in credit card fraud of 15 per cent in 2008.

Online fraud and card cloning also account

Online fraud has also been an increasing problem, affecting 39 per cent of victims, while card cloning from a cash point or chip and pin device, accounted for 21 per cent of fraud cases. Out of all cards that are physically lost and stolen, one in ten are also being used fraudulently.

The average sums that are fraudulently transacted from card holders, is more than £650. However, one in 20 victims - or around six per cent - reported losses of over £2,000. Worryingly, 42 per cent of card fraud victims did not know about these fraudulent transactions and only found out that they had been defrauded, when they were alerted by their bank. This is up six per cent from last year.

Kerry D'Souza, card fraud expert from CPP, says: "The dramatic increase in card fraud shows no sign of abating which isn't surprising given the desperate measures some people will resort to during the recession. Fraudsters are becoming increasingly sophisticated, especially when it comes to online transactions which are a particular cause for concern.

Vigilance is key

"Cardholders need to remain vigilant with their cards and take the necessary steps to protect themselves - from checking statements more frequently to keeping sight of their card when paying for transactions. It might seem like simple steps but they will go a long way in preventing fraud."

CPP has urged credit card users, to take simple steps so they can limit the chances of being affected by credit card fraud. Signing up to Verified by Visa and MasterCard SecureCode can be beneficial for online shoppers, as it can help to put a stop to lots of unauthorised online spending.

The firm also advises card holders to not let staff take your debit or credit card out of sight, even for a second. Checking receipts against your transaction statements when you get home can help you to find out if any extra transactions have been made on your card.

Try not to let someone else take money out on your behalf, and where possible, refrain from carrying multiple debit or credit cards in your wallet. In addition, try not to carry your credit cards loose in a bag or pocket.