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U.K. Credit Card Fraud Falls to Lowest Level in a Decade


The losses from fraudulent credit and debit card transactions in 2010 totaled £365.4 million ($591.7 million), according to the report, down 17 percent from 2009 and 40 percent lower than the all-time high level recorded in 2008 – £610 million ($987.8 million).
The gains were not evenly spread, with some transaction types faring better than others:

  • Online banking fraud losses decreased by 22 percent on a year-over-year basis to £46.7 million ($75.6 million), despite a 21 percent increase in phishing attacks for the period.
  • Phone banking fraud losses rose by 5 percent in 2010, reaching £12.7 million ($20.6 million). These losses are mostly due to customers disclosing their account information to fraudsters pretending to be calling from their bank.
  • Retail face-to-face fraud losses dropped by 6 percent to £67.4 million in 2010 ($109.1).
  • Cash machine fraud losses fell by 9 percent to £33.2 million ($53.8 million) for the year.
  • Check fraud losses fell by 3 percent to £28.9 million ($46.8 million) during 2010.

Lower Fraud Level Due to Higher Fraud Awareness

The U.K. Cards Association’s report credits the fall in fraud levels to the higher awareness among retailers and consumers on how to prevent fraud. The following factors were the biggest contributors to the downward fraud trend:

  • Better protection from retailers of their chip and PIN credit card equipment. In Europe chip and PIN credit cards are much more prevalent that the type used in the U.S., which require a signature to complete a transaction.
  • Increased consumer participation in Verified by Visa and MasterCard SecureCode. These authentication services managed by the two credit card associations verify the identity of the customer through a password created by the cardholder when she signed up for the service.
  • Improved sharing of fraud data.
  • Increased use of fraud detection services by banks and businesses.

Category: Credit Card

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