Chip and PIN technology and better security procedures have forced card fraudsters to turn to social engineering

Card fraud up despite increased banking security

Card fraud hit a record £174.5m in the first half of this year, new figures show, but criminals are relying on social engineering in the face of better security.

The figure is the biggest half-yearly total ever recorded by Financial Fraud Action UK, which prevents crime on behalf of the financial services industry, who said intelligence suggests that criminals are targeting business accounts in particular, which tend to have larger amounts of cash stashed in them.

Within the latest half-year total, e-commerce fraud loss is estimated to be £110m, marking a 23 per cent jump compared with the first six months of 2013, while online banking fraud losses have surged by 71 per cent compared with the first half of 2013, hitting £29.3m.

But the widespread use of technology such as chip and PIN and improved fraud-screening processes by banks mean fraudsters are increasingly concentrating their efforts on obtaining personal details rather than trying to attack banks' security systems.

According to the body a growing problem which has been helping to drive up these losses is a scam known as "vishing", which involves criminals cold calling people or businesses and posing as someone working for a body such as a bank or the police.

The fraudster typically tricks the victim into revealing personal information such as their online banking details and their PIN. In some cases, the victim is duped into transferring money into another account or allowing a courier to collect their card in the belief that it is being returned to the bank, whereas in fact it is being delivered straight to the criminal.

Detective chief inspector Perry Stokes, head of the Dedicated Cheque and Plastic Crime Unit, which targets criminal gangs behind payment fraud, warned: "Be very suspicious of phone calls, texts or emails which come out of the blue asking for personal or financial details, regardless of who they claim to represent.

"Be aware of warning signs: your bank will never ask you for your four-digit PIN, to transfer or withdraw money, or to give your card to a courier. We are asking members of the public to pass this information on to any family or friends who may be unaware."

Once the victim's details have been compromised, fraudsters will often target retailers whose Internet shopping protections are not adequate, Financial Fraud Action said.

The body also urged consumers to make sure their security software is up to date, to help combat criminals' use of computer viruses to steal personal financial information, pointing out that software is often available for free to download from banks' websites.

The body also said that fraud on contactless cards, which allow people to pay for low-value items by swiping their card on a reader, continues to be "negligible". Some £51,000 was lost on contactless cards over the first six months of the year, representing just 0.007 per cent of all contactless spending.

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