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Phishing and key-logging Trojans cost UK banks £12m
While overall UK card fraud losses top £500m in 2004...

By Andy McCue

Published: Tuesday 08 March 2005

Phishing scams and Trojan keystroke loggers were behind UK online bank fraud totalling £12m last year, according to the latest official figures.

It is the first year the online fraud figures have been collected but total UK card fraud losses rose 20 per cent to £504.8m in 2004 as revealed in the annual figures by UK payments body APACS.

APACS put some of this down to thieves targeting the high volumes of new chip and PIN cards sent out in the post with fraud on cards stolen before cardholders received them in the post shooting up 62 per cent to £72.9m.

APACS claims the introduction of chip and PIN technology will lead to a reduction in card fraud but this still leaves question marks over how the industry plans to tackle card-not-present fraud for phone, internet and fax transactions, which increased 24 per cent to £150.8m in 2004 and is still the single biggest type of card fraud.

ID theft on cards has also shot up 22 per cent to £30.2m in 2004, although it still remains a small proportion of overall losses.

The area that chip and PIN is set to have the biggest impact is counterfeit card fraud, which rose 17 per cent to £129.7m in 2004.

Sandra Quinn, director of corporate communications at APACS, said fraud forecasts showed that without the introduction of chip and PIN, card fraud losses would top £800m by 2005.

"As more of us use a PIN the harder the criminal's life becomes. But clearly they are going to keep targeting cards," she said in a statement.

But business intelligence and anti-fraud technology vendor SAS claims chip and PIN will simply lead criminals down the identity theft route instead, while online anti-fraud firm Early Warning claims chip and PIN will lead to further rises in card-not-present fraud where liability for losses rests with merchants and not the card issuing companies.