New figures released today [12 September 2014] by Financial Fraud Action UK (FFA UK) show that card and remote banking fraud increased during the first six months of 2014. The intelligence behind the figures reinforces recent trends, which have seen the growth of deception crimes seeking to persuade consumers to part with their personal and financial information, as well as criminals’ use of computer viruses. As a result, customers are being warned to be vigilant and be aware of the key warning signs of scams.

Fraud losses on UK cards totalled £247.6 million between January and June 2014, an increase of 15 per cent from £216.1 million during the same period in 2013. Fraud as a proportion of card purchases has remained flat at 7.4p for every £100 spent, the same proportion as the industry reported at the end of 2013.

Losses on remote banking fraud rose to £35.9 million, up 59 per cent from £22.6 million in 2013. Within this total, online banking fraud losses rose to £29.3 million, up 71 per cent from £17.1 million in 2013. Telephone banking fraud rose to £6.6 million, up 20 per cent from £5.5 million. Intelligence suggests criminals are targeting business accounts which typically allow higher value fraudulent transactions.

Losses due to remote card purchases (those made online, over the telephone or by mail order) rose to £174.5 million in the first six months of 2014, up 23 per cent from £142.0 million in the same period in 2013. Within this total, the e-commerce fraud loss is estimated to be £110.0 million, up 23 per cent from an estimated £89.5 million in the first half of 2013.

While significant, this rise needs to be viewed in context of the increase in internet shopping by British consumers, with spending up from an estimated £40.5 billion in the first half of 2013 to an estimated £47 billion in the same period in 2014, according to IMRG [1]. Card payments are the main driver of online spending growth as they provide the most effective way to pay online.

A key driver for the rise in fraud losses has been the growth of deception crimes aimed at individuals and businesses. A combination of Chip and PIN and advanced fraud screening detection processes used by the banks drove a long-term decline in card fraud up to 2012. This is illustrated by the 72 per cent decline in high street fraud losses between 2004 and 2013. In response, fraudsters are increasingly concentrating their efforts on obtaining personal and financial details from individual customers rather than attacking the security systems used by the banks.

An increasing problem has been criminals telephoning people at home while posing as the bank, police or representatives of other trusted organisations, such as Government departments. These cold-calls typically involve the fraudster tricking their victim into revealing personal or financial information, such as their 4 digit PIN or online banking details; transferring money to another account; or accepting a courier into their home to pick up their card.

Once details have been compromised, they are then used to commit fraud through both remote (telephone or online) banking channels and through shopping online. Commonly, fraudsters target retailers who have not introduced adequate internet shopping protections.

Research conducted by ICM for FFA UK showed that a quarter (25 per cent) of customers do not take steps to challenge the identity of a cold-caller, with this figure rising to 34 per cent of 18-24 year-olds [2].

To stop these scams, police and fraud experts are highlighting the key warning signs:

Your bank will never: