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Research Reveals Extent of Card Fraud and Identity Theft

There was a large increase in card fraud losses in the UK in 2015, according to new analysis by analytic software firm FICO.

Increase in Card Fraud across Europe

Total losses apparently rose by 18%, and the majority of this came from online transactions, which FICO says is a reflection of growth in this channel, the ease of accessibility to funds and lower risk for criminals, and the theft of personal data through cybercrime.

Across Europe, card fraud apparently increased in as many as ten out of the 19 countries studied, with Greece, Denmark, France and Russia experiencing the highest rises after the UK.

UK Experiences Highest Increase

The increase in card fraud amounts to additional loss of £88.5 million in the UK alone. The research shows that 75% (£66.7 million) of the increase was in card not present (CNP) fraud, and £42.4 million of CNP fraud came from e-commerce. The UK contributed about 43% of the total card fraud losses across the 19 European countries studied.

According to FICO, one of the reasons behind such a sharp increase in the UK could be that customers here expect a seamless purchasing experience.

“We cardholders are very demanding, and if we don’t get what we want then we let people know in the form of reviews and feedback, not to mention switching cards,” explained FICO fraud consultant Martin Warwick. “Banks want to avoid intervening unnecessarily when customers are shopping on the internet. E-commerce spending in the UK has nearly quadrupled since 2007, so you see why this is such a target for criminals.”

Rise in Identity Theft

In a separate piece of research, this time by Experian, researchers have found that people who use mobile and social technology the most have suffered the biggest increase in identity theft in the UK.

These users apparently make up 7.7% of the population, but accounted for 23% of all ID fraud victims in the UK last year. They also saw their risk of ID theft rise by 15.7% compared to the previous year, which suggests they are failing to take the necessary precautions to protect against identity theft.

Interestingly however, the group that suffered the next biggest rise in identity theft appears to come from the opposite end of the spectrum. This group consists of older and retired households, who often live in rural communities and have limited interest in technology. These people account for 1.6% of the population in the UK, but experienced a 15.4% rise in fraud compared to the previous year.

“It is vital that those embracing technology also embrace protecting themselves online,” said Nick Mothershaw, fraud expert from Experian. “Using the latest device doesn’t necessarily mean full protection and being complacent about the risk of ID theft makes for a tempting target for ID fraudsters.”  

“At the other extreme, those using more traditional channels are not immune to fraud,” he added.  “These people are being targeted through phone and email scams by fraudsters trying to steal their details. They tend to be less aware of the types of scams fraudsters undertake, who can be very manipulative and sound trustworthy on the phone.”

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