Credit Card Fraud

BBC Article on Credit Card Fraud

Credit card and personal banking fraud costs consumers and banks in excess of £400m a year. At the start of national card security week, BBC News Online explains how you can prevent fraudsters from raiding your account.

Is preventing fraud just a case of keeping my credit and debit cards safe?

It does help to keep your cards safe. A great deal of fraud arises from teams of thieves stealing peoples' cards and then going on a spending spree before their owners wake up to the fact that they have been robbed.

But picking peoples' pockets is a high visibility crime and there ia a reasonable chance of being caught.

Many fraudsters prefer to employ more sophisticated - some would say 'white collar' - techniques to commit their crime.

So if the main threat isn't teams of pickpockets, what should I be on the lookout for?

In short, be very alert any time that someone wants to take your card out of your sight.

The major way this fraud is carried out is by card "skimming".

Skimming is a process where the data from a cards magnetic strip is electronically copied onto another card.

This fraud is often carried out in restaurants, shops and petrol stations - you hand over your card and a replica card is produced and used, sometimes on the other side of the world.

Skimming UK cards nets fraudsters £160m a year.

Fraud carried out when cards are not present - over the phone, mail order and via the internet is less common, but it still accounts for more than £100m a year.

What steps can I take now to stop myself falling victim?

The Cardwatch site, set up by Association for Payment Clearing Services (Apacs) to increase awareness of card fraud, calls on people to be vigilant.

Cardwatch advises consumers never to let cards out of sight and to check receipts and bank statement thoroughly.

What is more, they advise consumers to go to the drastic step of shredding all their card receipts.

Disturbingly, a card receipt is all a clever fraudster needs to reproduce a replica card.

You are at most at risk when the fraudster can easily guess your card Pin number.

Avoid using easily traceable facts about you - such as your date of birth - as your Pin number.

In addition, have a different Pin for every card. It may be a pain to remember all the numbers, but it will make the job of the fraudster very difficult indeed.

Sounds terrifying. I never want to let my card out of my sight again! What happens if I do fall victim to credit or debit card fraud?

The law states that cardholders are not liable for fraudulent transactions as long as the original card is still in their possession.

Any bank or business turning down a refund request is on very shaky legal ground.

The problems arise when a card is stolen or lost and is then used fraudulently.

Under these circumstances according to the terms of the Consumer Credit Act and the Banking Code you are liable for damages up to a maximum of £50.

However, an Apacs spokesperson told BBC News Online that banks often waive the £50.

If the banks and retailers end-up shouldering most of the bill for fraud why haven't they cracked down hard?

UK banks and retailers have been widely criticised for acting too slowly to prevent fraud.

After extensive trials earlier this year UK banks and retailers are to introduce Pin and Chip technology.

Instead of signing for goods, the users will have to enter a four-digit pin number.

It is expected that 850,000 retailer terminals, 120 million cards and 40,000 cash machines will be upgraded over the next 18 months.

A similar programme was launched in France 10 years ago, and credit card fraud fell by 80%.

UK Online Casinos; The UK banking sector has long argued that it was waiting for an internationally recognised chip and Pin system to become available before taking the plunge.