ATM fraud 'up 85%

Cash machine fraud has soared by 85%, causing losses of ?61m during the past year, according to figures released today by the card payment industry.

The Association of Payment Clearing Services (Apacs) has announced that cash machine crime was the fastest growing type of fraud in the year leading up to June 2004.

Apacs said total card fraud had risen by 18% to ?478.8m in the 12 months to June 2004. Counterfeit card fraud fell by 2% to ?123m while lost and stolen card fraud rose by 11% to ?118.8m. Identity theft also soared, increasing by 50% to ?37m.

According to Apacs, the main reason for the increase was a rise in the use of skimming devices which can copy the details held in the magnetic strips on the backs of cards. Also on the increase are miniature cameras set up to record a cardholder's pin number when they withdraw cash.

Apacs said that the organised gangs behind the frauds began by targeting large cities. However, the body said that they are now believed to be operating at cash machines across the country.

Despite rising crime figures, Apacs claimed that the majority of cash machines did not pose a risk, since ?144bn was safely withdrawn from ATMs in 2003.

The introduction of chip and pin technology, where people enter a pin when paying for goods rather than signing a receipt, is aimed at preventing fraud by including information on a smart chip rather than magnetic strips.

Recent figures suggest that three-quarters of all cardholders now have at least one chip and pin card in their wallet. By the end of October, 30.8 million cardholders had at least one new chip and pin debit or credit card, and in total 65.5m cards have been issued by banks, building societies and other card issuers.

Sandra Quinn, spokeswoman for Apacs, said: "Criminals are making extra efforts to target cash machines before chip and pin is fully rolled out. In the meantime we all need to be more vigilant when we use our cards."

She said that the vast majority of cash withdrawals were safe and pointed out that the banking industry is working with the police and organisations such as Crimestoppers to keep it this way.

"Remember, it is much safer to carry a card around then keep a lot of cash in your wallet and if you are a victim of card fraud you will not suffer any financial losses as long as you haven't acted negligently," she added.

Barclays bank this month began trying out an anti-skimming device aimed at eradicating ATM fraud.

Barnaby Davis, head of ATMs at Barclays, said: "The ATM fraud figures released by Apacs today are yet another reminder of how the criminals are getting increasingly sophisticated and that we, the industry, need to work extra hard to keep one step ahead of them.

He said that, should the anti-skimming trial prove successful, the bank will be looking at installing the devices on all of its ATMs.

Mr Davis added: "Our advice to people is to always stay vigilant when withdrawing money.

"There are a number of simple things consumers can do to protect themselves, such as shield their pin number from others and alert the police if they think the ATM they are using has been tampered with."

He urged consumers to check their statements regularly to detect signs of fraud early on, and to let their banks know immediately if there appears to be a problem.