Cracking down on credit card fraud

If it hasn't already happened to you, the chances are you'll know someone who's been a victim of credit card fraud.

It's a crime that's on the increase and, according to market analysts Datamonitor, plastic card fraud is increasing at a rate of 30% a year.

And, with use of plastic growing all the time, it's a problem that the industry must take on and win. The banks and retail industries plan to spend around ?1.1bn on tightening up security, introducing new technology and making sure there is better information sharing to reduce crime.

Card fraudsters are determined individuals who watch out for those likely to leave a bag in an easy to steal place or who aren't vigilant when using their cards.

There are a number of ways they can sting you, the most common being counterfeit.

"Skimming" is a common counterfeit method, where the details in your card's magnetic strip are copied. "Card not present" is another scam, where your details are taken - and subsequently used fraudulently - through internet, mail and telephone transactions.

The UK has been criticised for being behind other European countries when it comes to tackling credit card fraud. However, we are catching up, and a number of initiatives are underway.

These include the future use of chip technology and PIN numbers when making purchases, better delivery systems for cards and rewarding retail staff who stop fraudsters using cards.

The government recently announced that by 2005 all UK plastic cards will be authorised by the customer keying in their PIN number rather than signing a receipt.

How to keep your cards safe

Being without your credit or debit cards is highly inconvenient, apart from the fact that fraudsters are profiting from them. So, it makes sense to look after them.

· Don't let your card out of your sight.

· Keep an eye on it when making a transaction.

· Carefully tear up receipts from transactions. So-called bin divers can take the information.

· Keep a close watch on statements and keep your receipts.

· Never write down your PIN or disclose it to anyone - even if they claim to be from the card company or police.

· Be careful when withdrawing money - is someone able to see your PIN number?

· Report lost or stolen cards immediately. Try and keep the number on you - the number will be on your last statement.

· Sign a new card as soon as it arrives and cut up old ones.

· Never carry a chequebook with your cards.

· Always watch out for your bag or briefcase in a public place and be aware of security at work - can you lock your belongings in a cupboard or drawer?

Safe shopping online

Online fraud is a growing problem and is a huge concern for credit card companies as sales increase.

Most internet fraud involves using card details fraudulently obtained in the real world to make card-not-present transactions in the virtual world.

Card-not-present fraud on internet transactions is low, at around ?12m, accounting for 3% of all card fraud losses, but the fears are it will grow substantially.

Last April, the UK banking industry began rolling out a cardholder address and card security code checking system to make card-not-present transactions - including those over the internet - more secure.

The following tips will help make your online shopping experiences safer.

· Check out the e-tailer. What is their postal address and telephone number? If these details are missing from the site, be wary.

· Always use a secure web browser and make sure that the e-tailer uses technology such as SSL (Secure Lockets Layer). This will be identified by a small padlock symbol or a broken key. Check, too, that the retailer uses encryption.

· The beginning of the retailer's internet address will change from "http" to "https" when a purchase is made using a secure connection.

· Shop with e-tailers you know or at least do some research on them before you buy. Be careful about buying from overseas - your rights of redress may not be the same.

· Check delivery and return policies.

· Keep a record of your transactions.

· Keep passwords secret and make sure they are difficult to guess.