Fraud losses rose in 2012; and one of the primary reasons was due to criminals using traditional scams such as ATM shoulder surfing in order to bypass the latest security measures, according to the Financial Fraud Action, an industry group created by the UK Cards Association to help combat and raise awareness around payment card fraud.
Detective Inspector David Timmins, DCPCU, said in a statement:
“As a consequence of more robust security features, criminals are resorting to low-tech deception crimes designed to dupe customers into parting with their cards, PINs and financial passwords.”
These low tech approaches appear to be working. In 2012, fraud losses on cards issued in the United Kingdom rose 14 percent to £388 million ($580 million). While still significantly less than the £610 million ($913 million) in fraud losses registered in 2008, the increase in fraud represents a disturbing uptick.
Furthermore, while criminals resorting to old school fraud techniques may grab the headlines, other factors have contributed to the overall increase. For example, card-not-present transactions increased by 11 percent in 2012 but with an 18 percent increase in online spending, the figure looks daunting. Online banking and check fraud losses also increased 12 percent and 2 percent receptively, however telephone banking fraud losses fell 25 percent.
With the broad implementation of EMV technology, payment card fraud losses have been steadily decreasing in the UK and around the world where EMV cards are widely issued. With this clear trend of decreasing fraud in EMV countries, a one year increase in fraud may prove to be just a statistical blip; it highlights the ongoing struggle to reduce fraud across payment industry segments.
Click here to read more from Financial Fraud Action.