The latest payment fraud losses for 2011, released today (7 March 2012) by the banking and card payments industry show that credit card, debit card and online banking fraud levels have fallen again. This continued success is thanks to efforts by the industry, partners, and importantly, customers. However, fraudsters’ activities in other areas have caused a minor increase in cheque and telephone banking losses.

Fraud losses on UK cards fell 7% from £365.4m in 2010 to £341.0m in 2011, resulting in a three-year reduction of nearly 45%. Losses are at the lowest levels since 2000. This healthy trend is a result of the industry’s efforts to deter, detect and prosecute fraudsters.

Current initiatives include:

• sign-up by retailers and consumers to online protection initiatives such as MasterCard SecureCode, Verified by Visa and American Express SafeKey;
• successful campaigns to raise customer awareness of fraud protection advice;
• improved sharing of fraud data and intelligence within the industry and with law enforcement and other sectors;
• raising retailer awareness of good practice to safeguard their chip and PIN equipment, along with both retailers and banks using fraud detection tools;
• continued upgrading of the chips on UK cards (see note 1); and increased roll-out of chip and PIN abroad.

Online banking fraud losses fell 24% from £46.6m in 2010, to £35.4m in 2011.

Factors contributing to this fall include: customers better protecting their own computers with up-to-date anti-virus software; banks’ use of sophisticated fraud detection systems; and banks providing customers with additional software and hand-held devices to log on to internet banking. This decrease has occurred despite a continuing rise in phishing attacks and attacks involving malware. Phishing attacks are up 80 % from 2010.

Telephone banking fraud losses rose from £12.7m in 2010 to £16.7m in 2011

This increased 32%. Most losses involve customers being duped by criminals, using fake emails or cold calling, into disclosing their personal security details such as telephone banking passcodes. These details are then used to commit fraud. Individually, banks use sophisticated security systems to protect their customers' accounts. These systems are constantly upgraded to maintain their effectiveness. Collectively, the banking industry shares information and intelligence on this type of fraud with law enforcement and the telecommunications industry: to identify fraudulent activity and those seeking to undertake it, and to maintain the security of telephone-based services.

Cheque fraud losses rose from £29.3m in 2010 to £34.3m during 2011

An increase of 17%. This rise is mainly from an increase in fraudsters stealing genuine cheques and altering the payee name or using details from genuine cheques to create counterfeits. Over 90% of attempted cheque fraud gets stopped before the cheque is paid. The industry continues to work with cheque printers to enhance security features on cheques, and also to provide advice to consumers regarding best practice when writing and receiving cheques.

Melanie Johnson, Chair of The UK Cards Association comments:
“Driving down fraud and keeping cards safe continues to be a priority for the industry. This is the third year card fraud losses have fallen - clear proof that our endeavours to fight fraud are packing a punch. Customers have also played their part in driving down losses by taking heed of advice about looking after their personal and financial details. Fortunately, they can always be confident that if they are the innocent victim of fraud, they have excellent fraud protection that they don’t get if they use cash.”

DCI Paul Barnard who heads up the industry-sponsored police squad, the Dedicated Cheque and Plastic Crime Unit says:
“As technological advances have made our payments more secure, we’ve seen a spike in more simplistic crimes. Many scams involve customers being conned into handing over their cards and PINs, or their telephone banking security details by someone calling, pretending to be their bank or police. Our appeal to the public is to be wary of any unsolicited phone calls or emails – never hand over your card and PIN or bank security details in full as neither your bank or the police will ever ask you for these.”