Card identity fraud jumps 45%

Identity fraud involving credit and debit cards rose by 45% in 2003, despite the first fall in overall card fraud in eight years, according to new figures today.

The practice of creating false accounts in another person's name, or taking control of another person's existing accounts, was worth ?29.7m in 2003, the Association for Payment Clearing Services (Apacs) said.

The total cost of card fraud fell by 5% to ?402.4m, but Apacs said the decline was entirely due to a fall in fraud committed abroad on UK cards, with crime at home rising slightly. The trade association admitted there was still more to be done to combat card fraud, but insisted: "Cards are still safer than cash."

Today's figures showed that the largest type of card crime last year was "cardholder-not-present" (CNP) fraud, which was up 6% to ?116.4m. CNP fraud generally involves the unauthorised use of stolen card details in payments by telephone, mail order and internet. Usually, the card details are taken from discarded receipts in people's bins, or copied down by corrupt vendors without the cardholder's knowledge. CNP overtook counterfeit card fraud, which fell by 28% to ?106.7m in 2003, while fraud on lost and stolen cards was also down, by 2%, to ?106.1m.

Apacs said the falling figures were the result of increasingly sophisticated intelligence systems which help spot fraud by tracking unusual cardholder spending patterns. New "chip and PIN" systems, which are replacing signatures with personal identification numbers to verify payments at the point of sale, would also help cut the figures further in coming years, the group said.

The new security measures appeared to be driving criminals to less common types of fraud, with identity fraud up 45% and fraud at cash machines growing by 34% to ?39m. Fraud at cash machines can vary from the simple theft of a wallet containing a card and PIN code reminder, to "shoulder surfing" - where criminals look over a cash machine user's shoulder to watch the PIN being entered, then steal the card - to more sophisticated methods such as card-trapping devices and even hidden cameras monitoring people entering their PINs.

Apacs spokeswoman Sandra Quinn said: "It is encouraging that fraud figures on UK cards have gone down, but the fraudster will always look for new avenues and that means we cannot be complacent.

"When plastic cards were first introduced in the 1960s it was never envisaged that they would be used to buy goods and services in an environment where neither the card nor the cardholder would be present. A number of initiatives are in place to clamp down on this type of fraud and as a result the growth rate of fraud where cardholders are not present is slowing."

Apacs said cardholders could also help by always keeping their card in sight at the point of transactions, discarding bank statements and receipts carefully, and checking their statements for any unexpected payments.

"Despite this, cards are always safer than cash," Ms Quinn added. "The chances of becoming a victim are still low and fraudulent transactions make up only 0.13% of all card transactions."