Levels of card and online banking fraud in the UK rose during 2013 according to data released by Financial Fraud Action UK (FFA UK), a collective for the UK financial services industry that co-ordinates its fraud prevention activities.
Fraud losses on UK cards totalled £450.4m in 2013, a 16% rise on the 2012 figure of £388.3m but still 26% lower than the peak year for fraud of 2008. At the same time, total spending on all debit and credit cards reached £532bn in 2013, a rise of 6.1% on 2012, with 10.9bn transactions made in the year.
Improved fraud detection and prevention systems used by banks and established internet retailers continue to have a positive impact, but intelligence suggests that criminals are now targeting individual consumers and small businesses, which drove the recent reported losses reports FFA UK.
Cheque fraud and telephone banking fraud fall by 22% and 8% respectively last year, but losses on remote card purchases made online, over the telephone or by mail order increased by 22% to £301.1m, from £246.0m in 2012.
Losses due to fraud on lost or stolen cards increased 7% to £58.9m from £55.2m in 2012, with distraction thefts in shops and bars and shoulder-surfing at automated teller machines (ATMs) highlighted. Meanwhile, ‘vishing’ over the telephone, with fraudsters tricking consumers into parting with personal or financial information, contributed to a 14% rise in card ID theft to £36.7m from £32.2m.
Online banking fraud has increased 3% to £40.9m from £39.6m in 2012. Intelligence shows the increase was also driven by the rise in ‘vishing’ and malware. Fraudsters are increasingly targeting business customers rather than personal accounts due to the prospect of a potentially higher return.
Telephone banking fraud fell 8% to £11.6m from £12.6m in 2012, reflecting tighter processes by banks which are designed to confirm customers’ identity. Cheque fraud losses fell 22% to £27.5m from £35.1m in 2012. Improved fraud detection methods used across the industry, including the digital analysis of cheques, was behind the decrease
FFA UK said that the UK is Europe’s leading online shopping economy with spending by British consumers online growing by 16% in 2013 to reach £91bn. Card payments were the main driver of this growth, providing the most effective way to pay online. Debit and credit cards also offer consumers protection against fraud.
Online fraud against UK retailers totalled an estimated £105.5m last year, a rise of 4% on 2012. However, there was a sharp increase in fraud against online retailers based outside the UK, which rose 48% to an estimated £57.8m.
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