Banking and card fraud rises to £325 million
Losses from fraudulent use of payment cards, cheques, and online and mobile banking rose 6% to £325.3 million in the first half of 2015, according to figures released today.
Financial Fraud UK (FFAUK) said that even though the total amount of fraud increased by £17.6 million, fraud losses as a proportion of total spending fell to a four-year low.
That’s largely down to security systems installed by banks and credit card companies, which successfully detected and prevented almost a billion pounds’ worth of fraudulent transactions. In total, around 70% of all fraud attempts were thwarted in the first half of the year.
Katy Worobec, director of FFAUK, said: “Banks use sophisticated security systems to protect their customers, stopping over two-thirds of fraud from occurring.
“However, the industry is never complacent and banks are continuously improving the tools they use to beat the evolving threat of fraud.”
The fraud awareness group urged people to be vigilant online, as losses from online and telephone fraud rose by 37% compared to the previous year.
Worobec added: “Fraudsters are now attempting to trick people into handing over passwords, PINs and passcodes – the keys to the door – so it’s vital that customers safeguard their personal and financial information.
“Criminals impersonate many different organisations, including banks, the police, government departments and utility companies.
Card ID theft also rose by 28% to £18.8 million. That’s defined as when a fraudster opens an account in someone else’s name, or hijacks an existing account using stolen information.
The increases were offset by a 21% fall in cheque fraud, and a 34% drop in fraudulent face-to-face transactions.
Overall, card fraud rose 1% compared to the previous year, while spending rose more quickly. FFAUK said card fraud accounted for just 6.9p for every £100 spent, down from 7.5p at the end of 2014.
However, fraud on contactless cards remained very low, with around half a million lost on spending of £2.58 billion, equivalent to 2p in every £100 spent.
Detective Chief Inspector Perry Stokes, head of the Dedicated Card and Payment Crime Unit, said: “Criminals can be extremely convincing, so it’s really important to be on guard. Be very cautious about giving out your personal information.
“Remember that people aren’t always who they say they are. Just because someone has a bit of information about you does not mean they are definitely genuine. If you get a call, text or email out of the blue asking for your details or for you to transfer money, then do not respond. Instead report it to your bank straight away.”
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.