£110m internet card fraud down to shoppers

Careless shoppers are contributing to an annual £110m fraud bill from criminals who use stolen credit card details to purchase high-value goods over the internet and phone.

The 'card-not-present' phenomenon has risen by a third over the last two years, and is largely perpetrated online by criminals using credit card details from customer receipts that have not been shredded or destroyed, according to payment body the Association for Payment Clearing Services (APACS).

One in three people never shred or burn their old bank or credit card statements, one in five let others use their card to make purchases over the internet, phone or mail order and one in five rarely or never check their bank statements for rogue transactions.

APACS' Card Watch initiative is warning customers to be especially careful in the run up to Christmas and said that the details on discarded card transaction receipts contain enough details for someone to use for a 'card not present' purchase.

Sandra Quinn, spokeswoman for APACS, said in a statement that the internet is an easy and tempting target for criminals.

"Check your statements carefully for fraudulent transactions. Burn or shred those statements – and card receipts - when you have finished with them. Don’t let your card out of your sight – and don’t let anyone else use your card or have sight of your card details,” she said.

APACS has published new training and education materials this week for retailers worried about this kind of fraud, outlining fraud prevention tools and advice.

The move by APACS is intended to cut the high losses from 'card not present fraud', which are second only to counterfeit card fraud - which is being tackled by the chip and PIN initiative that will see signatures replaced by PIN numbers for transactions using the new 'smart' bank cards.

Consumers are not the only victims of this card fraud and retailers often bear the brunt of any losses from fraudulent transactions.

A spokesman for the British Retail Consortium (BRC) said it is pleased at the focus on practical steps retailers can take to help foil fraudsters trying to use stolen details for internet and phone transactions.

Peter Dorrington, fraud expert at SAS UK said shoppers need to be vigilant to avoid being a victim of both counterfeit and card-not-present fraud. He advised consumers to check receipts against bank statements regularly and shred old ones, and not to let their card out of sight in shops or restaurants to make sure it is swiped only once.

Richard York, secure technology programme manager at ARM, said there is technology to help prevent card-not-present fraud but chip and PIN is the priority for banks and retailers at the moment.

"You can have card readers in PCs – that has been tried and tested and works – but it is not clear that the banks would want to roll that out in any quantity," he said.