Online fraud losses soared to $88m last year in UK

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Online fraud losses soared to £33.5 million ($88 million) last year, with an increase of 44 per cent from 2005 following a surge in phishing attacks, new research shows.

The fraudulent use of UK credit and debit cards abroad also escalated last year, as a result of the uptake of chip and PIN technology that reduced the opportunities for card crime at home. Fraud abroad totalled £118.2 million last year – up 43 per cent on 2005, according to Apacs, the UK payment association.

The introduction of chip and PIN has also contributed to the rise in card-not-present fraud, using telephone and internet transactions, which jumped by 16 per cent to a total loss of £212.6 million in 2006 and now accounts for just under 50 per cent of all card fraud losses, the report said.

Conversely, losses at UK retailers from face-to-face transactions have plummeted by 47 per cent since 2005.

Online fraud has been driven by an increase in phishing incidents, which leaped from 1,713 in 2005 to 14,156 last year. Scams involving identity theft, often reported to be the UK’s fastest growing crime, rose to £31.9 million ($83.3 million), an increase of five per cent.

However, overall card fraud losses fell from £439.4 million ($1.07 million)in 2005 to £428 million ($1.05 million) last year – a decrease of nearly £80 million ($1.96 million)over the past two years.

“These figures clearly show that there is no one-size-fits-all approach to dealing with fraud,” said Sandra Quinn, director of communications at APACS.

“Chip and PIN has had a hugely positive effect on fraud losses over the counter in UK shops and stores, but we are seeing more fraud on transactions that do not use chip and PIN – such as over the internet and phone, by mail order and abroad in countries that have not yet fully upgraded to chip and PIN.”

She added: “Fighting fraud is never going to succeed with a single-layered approach. It requires different sectors to work together on developing and implementing strategies, sharing best practice and, most importantly, data.”
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