Cards on the table

A few thoughts on the UK credit card, debit card and online banking fraud figures released this week by The UK Cards Association. 

Fraud losses on UK debit and credit cards fell seven per cent in 2011 to £341 million, an 11-year low. This has understandably made a lot of headlines in the last couple of days. But little attention has been paid to the sizeable increase in cheque and telephone banking losses last year.

The reduction in card fraud can be attributed to such initiatives as MasterCard SecureCode, Verified by Visa and American Express SafeKey; continued upgrading of the chips on UK cards; and increased roll-out of chip and PIN abroad. All of which have made the fraudster's life that little bit more difficult and sent him/her off to other areas. Hence the increase in cheque and telephone banking losses.

Online banking fraud losses dropped 24 per cent from £46.6 million in 2010, to £35.4 million in 2011. Factors contributing to this fall include: customers better protecting their own computers with up-to-date anti-virus software; banks’ use of sophisticated fraud detection systems; and banks providing customers with additional software and hand-held devices to log on to internet banking. The press release I received notes that this decrease has occurred despite a continuing rise in phishing attacks and attacks involving malware. Phishing attacks were up 80 per cent from 2010.

The rise of phishing shouldn't come as a surprise. Whilst we should welcome the fall in online banking fraud, we should also remember the increasing sophistication of cybercriminals. For many of them, it's not about what was taken in 2011 or indeed what they can get their hands on this year. They're playing the long game, stockpiling with an eye on two or three years from now.