How to combat card fraud

Holly Thomas / 18 March 2014

Credit card crime has risen to its highest levels in eight years, according to new figures.

Fraud due to stolen credit and debit cards caused a loss of £58.9million in 2013, marking a 7% increase on the previous year and the biggest loss since its peak in 2006.

The total rises to £450.4million when crimes such as identity theft, cloned cards, computer viruses and internet scams are included – a 16% increase on the previous year.

Read our guide for victims of identity theft.

Security features introduced by banks and retailers have forced criminals to change tactics, according to Financial Fraud Action UK, who now focus more on simply tricking people into handing over their card and security details.

Beware of distraction thefts

Consumers are being warned about a series of bank card scams, many of which could be avoided with more awareness.

The UK Cards Association, which produced the figures, highlighted "distraction" thefts of cards as a particular problem. It warned that consumers are frequently being targeted while using their cards in shops or bars, or at cash points.

They might be asked for directions and while they are distracted the criminal will steal their card.

Read about the scams used to steal your identity.

Telephone and internet fraud

Telephone and internet fraud produced the largest rise in losses. It rose by 22% last year, to £301.1million, and now represents three-quarters of all card fraud.

The huge growth in online shopping, with the UK now Europe's leading online retail economy, is partly responsible for such a large increase.

Fraudsters are increasingly using digital attacks, using malicious software which is unknowingly downloaded onto a computer and then enables fraudsters to steal personal or financial information or perform unauthorised actions on the device.

In order to help tackle this trend, experts and the police are urging consumers to install security software, often freely available from a customer’s own bank.

Never hand over your bank details

Consumers are also increasingly being tricked into handing over bank account details, as a result of so-called vishing attacks.

Fraudsters phone consumers, telling them a suspicious payment has been made from their account. Even though many people put the phone down, and call their bank back, the fraudsters often stay on the line.

Since consumers think they are talking to their bank, they frequently give away passwords or PINs.

In cases of so-called courier fraud, the criminals send a courier round to the victim's address to pick up their cards.

Cheque fraud losses fell 22 per cent to £27.5 million from £35.1 million in 2012. Improved fraud detection methods used across the industry, including the digital analysis of cheques, has led to the considerable decrease.

Detective Chief Inspector Perry Stokes, head of the dedicated cheque and plastic crime unit, said: “Whether in the real world or online, these latest fraud figures show just how important it is for consumers and businesses to know how to protect themselves against fraud.

“Fraudsters can be extremely persuasive – do not be fooled.”

Read our guide to staying safe online.

Your rights

If you become a victim of card fraud it is important that you know your rights.

Report the problem straight away to your card provider. There will be a 24-hour emergency number on your bank statements so make a note of this and call it as soon as you discover your card has been lost, stolen or if you suspect fraud. Where appropriate, report the case to the police as well, and keep a record of any correspondence.

The burden of proof lies with the bank and it’s up to them to show that you authorised a payment or failed to protect your debit card details or pin.

With credit cards, the situation is slightly different. If someone uses the card and pin without your knowledge, the most you will ever have to pay is £50. 

It is sometimes difficult to detect identity theft until it is too late. Read our guide to the warning signs.

Stay safe

Top tips from Financial Fraud Action UK to avoid becoming a card scam victim:

1. Get the most up-to-date security software installed on your computer, including anti-virus.

2. Only shop on secure websites. Before entering card details ensure that the locked padlock or unbroken key symbol is showing in your browser.

3. Be suspicious of unsolicited emails that are supposedly from a reputable organisation, such as your bank or the tax office and do not click on any links in the email.

4. Make sure you are the only person who knows the PIN for your card.

5. Be aware: Your bank or the police will never phone, email or visit you to ask you for card PIN or to pick up your card. Never hand your card over to anyone who comes to ‘collect it’.

6. Check your bank and card statements for unusual transactions. If you spot any let your bank or card company know as soon as possible.

7. Rip up or preferably shred statements, receipts and documents that contain information relating to your financial affairs when you dispose of them. Some banks offer paperless statements.

8. Shield the PIN with your free hand whenever you type it into a keypad in a shop or at a cash machine.

9. When writing a cheque make sure you draw a line through all unused space on the payee line and the amount line to help prevent the cheque being fraudulently altered.

For more useful tips, read our guide to protecting yourself from identity theft.

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.