UK payment cards annual fraud losses hit £567.5 million

Statistics by Financial Fraud Action (FFA) UK show fraud losses on UK payment cards totalled £567.5 million in 2015, representing an 18% increase from £479 million one year before.

Significantly,  total of £843.6 million of attempted card fraud was actually prevented by banks and card companies, which is the equivalent to £6 in every £10 of fraud being stopped.

Over the course of 2015 card spending increased by 7%, with FFA UK equating fraud as a proportion of spending to 8.3p for every £100 spent. Remote banking fraud losses reportedly totalled £168.6 million – a 72% rise from £98.2 million in 2014.

A total of £524.6 million of attempted remote banking fraud was stopped by bank security systems, which FFA UK said was the equivalent to £8 in £10 of fraud being prevented.

Katy Worobec, director of FFA UK, said: “Banks work extremely hard to protect their customers, using highly sophisticated security systems which stopped 70% of attempted fraud from occurring last year.

“Any increase in fraud is unwelcome but the industry is continually evolving its response to fraud as it develops. This includes investing in new detection and verification tools, working with law enforcement and educating customers of dangers. With the continued rise in impersonation scams and data breaches it’s vital that all customers are alert to the dangers.”

Total financial fraud losses were calculated at £755 million in 2015, which is a 26% increase on the previous year.

Key drivers of the rising fraud figure were said to be impersonation and deception scams in which criminals approach customers claiming to be from a trusted organisation, such as a bank, the police, a utility company or a government department.

The criminals aim to obtain personal and financial details that will then be used to commit fraud, and these scams often involve a phone call, text message or email claiming there has been suspicious activity on a customer’s account or that their details need to be updated or verified.

Fraudsters’ use of information gained through data breaches is also a key factor behind the rising figure, and there have been several high profile breaches reported in 2015, including TalkTalk and Carphone Warehouse, as well as many other smaller-scale attacks. This stolen data can be used to commit fraud directly, for example by using the card details online to commit remote purchase fraud.

FFA UK said that the use of malware [malicious software which is unknowingly downloaded onto a computer] and phishing emails to compromise customers’ security and personal details are also a contributing factor to the growing levels of fraud.

The pressure group says that the industry is continuing to address the increase in fraudulent activity by investing in new, innovative security tools and methods such as using biometrics and customer behaviour analysis.

Download the report HERE

The post UK payment cards annual fraud losses hit £567.5 million appeared first on Payments Cards & Mobile.