New figures released have shown that losses totalling £535 million were made last year as a result of credit and debit card fraud. This number is up by 25 per cent on the previous year and has been blamed on a rise in the number of crimes being committed abroad using stolen UK card details.

Offences known as ‘card not present’ fraud, which allows someone’s card information to be used to buy items over the phone, via mail order or through websites online, saw the biggest increase in criminal use.

This type of crime saw a growth of 37 per cent in 2007 and racked up a cost of £290 million, which is almost twice the amount for 2004. The increase is said to be as a result of the occurrence and installation of chip and pin equipment, making it a more attractive proposition for fraudsters.   

Apacs claim that these losses should be seen in context as the number of people who shop online has also increased dramatically.

These increase in losses resulting from card fraud, is the first time the banking industry have experienced a rise in costs since the chip and pin technology initially entered the public domain in 2003.

Banks and card companies have placed tackling ‘card not present’ crime as its number one priority, urging retailers and shoppers alike to sign up to secure online payment systems to help them combat the conmen. However, systems like Verified by Visa and MasterCard Secure code have reported a slow take up of the proposal.

Cardholders have cited the reason for this response as them being wary of handing over their card numbers and other security details to websites that appear when they are trying to make a transaction. This they say goes against the previous advice offered to them of not passing on private information in such circumstances.

However, the UK bank payments association, Apacs said that losses from online banking fraud had fallen by some 33 per cent since 2006, largely due to the greater public awareness of scams such as ‘phishing’.

This fall in online banking fraud comes despite Apacs being made aware of some 25,796 new bogus websites operating last year, a figure up from 14,156 in 2006.

As well as the problems being experienced in the UK, financial experts are also becoming increasingly concerned by the inferior secure payment systems adopted by other countries, which are allowing criminals to take advantage of this and commit such crimes.     

Overseas fraud accounts for more than £200 million of the UK total losses, with many cases of peoples’ details being used to create counterfeit cards for use abroad. Apacs say they are trying to encourage other countries to put into practice the chip and pin processes used in Great Britain to help to prevent this type of crime happening.