Card fraud down except in my wallet

Chris Wheal

Mar 10th 2010

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New figures from the UK cards Association show that total fraud losses on UK cards fell by 28% between 2008 and 2009 to £440.3m - a decrease of £170m on the previous year's total.

I am personally bucking that trend. I have another new credit card. My bank rang me to list some questionable transactions that had nothing to do with me and the old card was cancelled. One of my two cards - personal and business - gets replaced every year as a result of fraud.

My card was not stolen. It was in my pocket when the bank rang about the suspicious transactions. Whoever cloned it of got hold of the numbers, used it online to spend more than £500 a Curry's and topped up their O2 mobile phone (I am not with O2 for my mobile).

Impounded car

My business card (or at least a clone of it) was once used to pay more than £400 to release an impounded car. I'd like to think that, through the registration details in that case, and the mobile phone number topped up most recently, the culprits were caught.

But I doubt it. The banks do fund a special police unit to the tune of £5m a year. It has, apparently, saved £340m since 2002 including £24m last year. It saves less than five times what it costs, which is not very efficient, and that is little more than 5% of the amount of fraud still going on.

Banks do not do enough to counter credit card fraud because they charge so much to retailers using credit cards and such astronomical sums to customers who have balances outstanding that the losses to fraud are dwarfed.

Occupational hazard

And the losses this year are just 0.091% of total credit card spending, down from 0.124% last year. Fraud to credit card companies is - like imprisonment to Norman Stanley Fletcher in Porridge - an occupation hazard.

Other figures released show online banking losses totalled £59.7m in 2009 - a 14% rise on the 2008 figure. This came about by targeting customers' PCs, rather than the banks' own systems which are more difficult to attack.

There were also more than 51,000 phishing incidents recorded during 2009 - a 16% increase on the amount seen in 2008.

Phone fraud

Phone banking fraud losses were collated for the first time in 2009 and totalled £12.1m. Most losses involve customers being duped into disclosing security details - through cold calling or fake emails - that the criminal then uses to commit fraud.

Cheque fraud losses decreased from £41.9m in 2008 to £29.8m in 2009. The continuing decline in cheque usage has also played a part in the 29% fall in overall cheque fraud losses. Fraud on guaranteed cheques fell to £0.7m last year.

Safe and secure

Melanie Johnson, chair of the UK Cards Association: "The cards industry sees fighting fraud as a key part of keeping its customers' interests centre-stage.

"We are committed to a wide range of measures to ensure customers feel confident, safe and secure when they use their credit and debit cards - whether in a shop, abroad, online, at a cash machine or anywhere else.

Well sorry Melanie, but I don't think you are doing enough.