Increase from countries yet to adopt chip-and-PIN drives up losses after two-year fall

Total losses on UK-issued payment cards rose by 25 per cent in 2007 to £535.2m due to an increase in fraud abroad, according to payments group Apacs.

The main reason for the rise in the overall figures was a 77 per cent increase in crime committed by criminals stealing card details in the UK to make counterfeit magnetic stripe cards for use in countries that have yet to upgrade to chip-and-PIN technology.

The increase in overseas fraud represents an extra £90.5m lost and more than one third (39 per cent) of total card fraud losses.

This type of crime will become more difficult when the European banking industry meets its target to complete chip-and-PIN card rollout by 2010, said Apacs.

In the UK, chip-and-PIN technology is widely seen as a success, and face-to-face card fraud levels are down 47 per cent since 2005.

“Although card fraud levels have now begun to go up again due to fraud abroad and card-not-present fraud losses, chip-and-PIN has proved to be an undoubted success in reducing card fraud on the UK high street,” said a spokeswoman for Apacs.

Online banking crime losses totalled £22.6m in 2007, a 33 per cent decrease from 2006. But phishing incidents almost doubled from 14,156 in 2006 to 25,796 last year.

Further developments are needed to keep up with increasingly sophisticated scam techniques. For example, card-not-present crime is still on the rise: up 16 per cent in 2006 and now valued at £213m annually.