7 March 2006
The introduction of chip and PIN technology is being credited with reducing the amount of counterfeit and lost and stolen fraud by £58.4 million.
APACS, the UK payments association, said total card fraud losses fell by 13% compared to 2004 (£439.4 million in 2005 compared to £504.8 million in 2004).
This fall is attributed to chip and PIN which has already resulted in a reduction of nearly £60 million in combined counterfeit and lost and stolen card fraud losses - a fall of 24% - and in mail non-receipt fraud, which fell by 45%.
Sandra Quinn, director of corporate communications at APACS, comments "Seeing card fraud losses come down is cast-iron proof that chip and PIN is doing its job. Back in 2002 we forecast that fraud would have risen to £800 million in 2005 if we didn't make the move to chip and PIN so it's heartening to see total losses well beneath this figure."
However, faced with the new technology fraudsters appear to be changing tactics with card fraud rising on internet, phone and mail order transactions. This area, known as card-not-present or CNP fraud rose to £183.2 million from £150.8 million in 2004 - up 21%.
Good news in this area came from Lloyds TSB, which announced that the trial of its key-ring sized Access Code Device, giving customers a unique on off access code and a new way to log on to internet banking, resulted in none of the 23,500 customers who took part in the trial reporting any fraud on their accounts.
Matthew Timms, internet banking director said: "Lloyds TSB was the first bank to give this type of device to customers and is at the forefront of tackling online fraud. The response from customers has been fantastic and the fact that nobody taking part in the trial has had any fraud on their account since using this device is testament to the fact that technology is the way forward."