In the last months there has been but talk about EMV migration in the US, and the security advantages it will bring. Well Financial Fraud Action UK, the UK Cards Association and other industry associations in the country have bad news: crooks are skipping technologically advanced fraud to focus on low-tech deception crimes.
The group of associations had found that despite an effort to ramp up security for card payments, there has been a 14% increase in fraud losses on debit and credit cards from last year’s ten year low – bringing the total to £388 million.
This increase follows three years of significant decreases (2012 losses of £388m versus 2008 losses of £610m when fraud was at its peak, representing an overall decrease of 36%) with fraud dropping to a ten-year low in 2011. Efforts by the cards industry to enhance the security of payment systems has delivered substantial falls since fraud peaked in 2008.
However, the group of associations found that the impact of improved security features, such as Chip & PIN and more sophisticated detection tools have driven criminals to resort to deceiving consumers into such things as parting with their own cards, PINs and financial passwords. This includes distracting people in shops and bars, or shoulder surfing at cash machines and then stealing customers’ cards without them noticing, or even tricking them into handing over their card details on their own doorstep.
These scams are not only carried out in person, but also online. Online banking fraud rose 12 per cent to £39.6m from £35.4m in 2011. This increase has been largely driven by fake websites, which have tricked consumers into giving away their online banking login details. Evidence shows that online banking customers are also being tricked into divulging their login details, passwords and other personal data over the phone to someone they believe is from their bank but is actually a fraudster.
Despite the overall 2012 increase, the chances of becoming a victim are still low: the amount lost to fraud as a proportion of the amount we spent on our cards represents only 7p of losses for every £100, which is down from 12p per £100 recorded in 2008.
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