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Card fraudCard Watch, managed by APACS - the UK payments association, explain the different ways in which you could become a victim of card fraud and how to protect yourself. Fraud on credit and debit cards has a high cost to society as the proceeds are often used to fund serious organised crime, including drug trafficking and terrorism. Although the financial cost of card fraud is largely borne by the banking industry, the personal cost in time, inconvenience and frustration while an incident is investigated - being without cards, waiting for fraudulent expenditure to be reversed or offset, the sense of violation - is immeasurable. Types of card fraud · Lost and stolen fraud - A card is physically stolen from your wallet or home, or you lost the card. A criminal then poses as you to obtain goods and services. Most of this type of fraud takes place before you have reported the loss · Counterfeit card fraud (skimming) - A counterfeit, cloned or skimmed card is one that has been printed, embossed or encoded without permission from the card company, or one that has been validly issued and then altered or recoded. Skimming can occur at retail outlets – particularly bars, restaurants and petrol stations – where a corrupt employee puts your card through a device, without your knowledge, that electronically copies the data from your card's magnetic stripe. Sometimes skimming takes place at cash machines where tampering has occurred and a skimming device has been fitted. You will often be unaware of this kind of fraud until your statement arrives showing purchases you did not make · Card-not-present (CNP) fraud – This includes fraud conducted over the Internet, by telephone, fax and mail order. It is perpetrated when criminals obtain card details through the theft of your card details from discarded receipts or by copying down your details during a transaction. It is now the largest type of fraud in the UK · Mail non-receipt card fraud – This type of fraud involves your card being stolen in transit, once it has been sent out to you from your bank or building society. At particular risk for this type of fraud are properties with communal letterboxes, such as flats and student residence halls · Identity theft on cards – this occurs when a criminal uses your fraudulently-obtained personal information to open or access card accounts in your name Where card fraud takes place · Cash machines - A skimming device may be attached to a cash machine so criminals can copy the data on the magnetic strip of your card; Shoulder surfing – where criminals look over your shoulder and watch you enter your PIN, then steal your card using distraction techniques or pick-pocketing; Card-trapping – a device, inserted into a cash machine card slot, retains your card inside the cash machine. The criminal then tricks you into re-entering your PIN while they watch. After you stop trying and leave the machine the criminal removes the device, with your card, and withdraws cash · Abroad – Most of the fraud committed abroad on UK-issued cards is on cards that have been skimmed or compromised in the UK. However, this kind of fraud also occurs as a result of British holidaymakers having their cards stolen or compromised while they are away · Internet/e-commerce - most of this type of fraud involves the use of card details, fraudulently obtained through methods such as skimming or bin-raiding. Your card details are then used to make fraudulent card-not-present transactions, most commonly via the Internet. A smaller proportion of Internet fraud occurs when the criminal uses a genuine card intercepted in the post or obtained by application fraud. Spam e-mail gives fraudsters an easy way of contacting millions of Internet users areound the world, regardless of their physical location to try to dupe people into disclosing valuable personal information that could be used to commit all types of identity theft or to get card details that can then be used to make fraudulent purchases Preventing card fraud · Chip and PIN - Cards which have a microchip rather than a magnetic strip are much safer, as they are harder to counterfeit. Combined with the second security feature - a 4-digit PIN number, helps to prove that you are the genuine cardholder more than a signature can · The Dedicated Cheque and Plastic Crime Unit (DCPCU) - The DCPCU works on tackling the organised criminals behind the huge increases in counterfeit card fraud. They also encompass other categories of serious and organised cheque and plastic crime, such as cash machine fraud, account take-over/application fraud, mail intercept, cheque and card-not-present fraud Did you know...? The DCPCU recovered more than 3,400 counterfeit cards, 39,600 compromised card numbers and 5,420 cheques earmarked for fraudulent use between April 2002 and April 2005 · The Fraud Intelligence Bureau (FIB) - The FIB shares information between the banking agency, police forces and other law enforcement agencies to combat skimming and to identify major counterfeiting rings run by organised criminals · Working with retailers - Card Watch's 'Spot and Stop Card Fraud' education pack helps retail staff spot and capture card fraud criminals · Address verification and card security codes - Address Verification Systems (AVS) and Card Security Code (CSC) checking is available to businesses who accept card-not-present transactions · Verified by Visa and MasterCard SecureCode are secure payment systems that prevent criminals from using stolen card details for transactions over the internet · Retailers can also implement intelligent fraud detection software, available from third party providers · Fraud detection computer systems are used by banks and building societies, and can track customer accounts for unusual spending patterns that may occur due to fraudulent activity on a lost, stolen or compromised card · Lower floor limits - Most retail outlets and card-accepting businesses have a floor limit – an amount above which you will seek authorisation from your bank or building society before completing a transaction. Between 70% and 80% of transactions are authorised · The Industry Hot Card File (IHCF) enables retailers to electronically check every card transaction for cards being used fraudulently. More than 80,000 retailers subscribe to this electronic file that distributes data on lost or stolen cards. When a card is swiped as part of a normal transaction it is automatically checked against the file. If the details given match those of a card on file an alert is given to the retailer For more information, visit the Card Watch website.
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