Credit card fraudsters now turning to online

Credit card fraudsters now turning to online

	Published : Tue, 08 Nov 2005 11:40 By : David Simms Print this Story

LONDON: Credit card fraudsters are increasingly adopting online platforms, or so it appears, as the "chip-and-PIN" card verification system has effectively curbed offline frauds, according to the Association for Payment Clearing Services (Apacs).

"Card-not-present" fraud, in which fraudsters get hold of credit card details of people and use them to buy goods online or over phone or by mail order, has increased by 29 per cent, Apacs said, as it has launched a campaign to create consumer awareness on safety measures to prevent online frauds.

Apacs said losses as a result of frauds involving cards have fallen by 13 per cent to 253 million pounds in the six months ending 30 June compared with the same period last year. This has been mainly on account of the chip-and-PIN technology, where the user is required to type his or her four-digit personal identification numbers into keypads at shops instead of signing receipts.

Fraudsters have now resorted to online shopping where losses on account of frauds amounted to 90.6 million pounds in the first six months of the year, up from 70.2 million pounds during the same period in 2004.

Apacs also said online banking fraud -- "phishing" -- which duped customers into disclosing their personal security information, more than trebled to 14.5 million pounds in the same period.

Chip-and-pin technology was actually pioneered by France more than 10 years ago, which reportedly reduced frauds by almost 50 per cent.

Apacs said fraudsters used to try and copy a card's magnetic strip in order to produce a counterfeit but with the introduction of chip-and-PIN this is less of an option. Instead, they resort to get card details and then use them to shop online.

Apacs has issued the findings in order to alert online shoppers during the Christmas season. It said some web users continued to put themselves at risk by ignoring basic safety measures when buying online. It said 117 million of the country's 140 million payment cards have been upgraded to chip-and-PIN since the programme began in late 2003.

Experts advise online shoppers to sign up to security schemes such as Verified by Visa and MasterCard SecureCode, under which people have to type in a password or security code when they buy goods online, a procedure which makes fraud virtually impossible. Secure websites display a padlock or key symbol at the bottom of the screen.

U.K.'s banking regulations stipulate that cardholders are not liable for fraudulent transactions as long they are in physical possession of the original card. When a card is lost and there is a fraudulent use of it, the holder is liable for the first 50 pounds lost under the banking code.