Figures show fall in credit card fraud in 2009

04 March 2010 16:21:04

Fraudsters have become less focused on credit cards.

New figures show that fraudsters switched their focus away from credit cards in 2009, although cases of overall fraud rose by nearly 10% during the year. CIFAS - the UK's Fraud Prevention Service has published its latest 48-page report on fraud in the UK, providing a detailed overview of cases recorded by the organisation's members throughout 2009.

Fraud patterns in 2009

The statistic that is most likely to interest those considering credit card offers reveals that plastic card fraud fell by nearly 10% last year. The total number of debit and credit card frauds dropped from 70,423 cases in 2008 to 63,396 in 2009, representing a 9.98% decrease. Even identity fraud, the most common type of plastic card fraud, dropped by nearly 4%.

CIFAS admitted that this downward trend was surprising, but noted that it was largely offset by a "substantial increase" in bank account takeovers. Rather than attempting to apply for new credit cards, fraudsters have instead chosen to "siphon off funds that are already in circulation". The report authors wrote: "It can only be assumed that in a period when there is a lot more scrutiny paid to applications, and where two out of three credit card applications are rejected, other products are considered an 'easier target' and so the fraudsters' attention has been deflected elsewhere."

Is this the full picture?

Although there appears to have been a significant decrease in credit card fraud, CIFAS warned that the picture may not be so simple. The report shows that application fraud in relation to plastic cards declined by almost 36% in 2009 compared with 2008, but experts believe a number of factors may be masking the real trend. Firstly, the number of applications for new credit cards fell last year in response to companies tightening their lending criteria. "Even if the proportion of frauds within applications increases, this is unlikely to offset the total drop in applications," the report authors suggested.

Secondly, the number of credit card applicants turned away by lenders rose in 2009. CIFAS pointed out that a proportion of these unsuccessful applicants would have been fraudsters, but that these applications "never reach the fraud team's desk, and so will never be identified as frauds".

Peter Hurst, chief executive of CIFAS, confirmed that recorded cases were "only the tip of the iceberg". He explained: "Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of fraud that, due to tighter lending criteria, never got as far as the fraud department."

Protecting against fraud

In order to reduce the risk of credit card fraud, customers are advised to sign any new or replacement cards as soon as they arrive to reduce their usability if stolen. CIFAS also recommends keeping a list of all credit cards and account details so that providers can easily be notified in the event of theft.

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