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Card fraud increases 60 per cent in 18 months

ACI’s 2010 Global Card Fraud Survey has been making a splash in the media over the last few weeks. According to our research, approaching a third (29 per cent) of consumers across eight major economies have been victims of card fraud in the past five years. This is up from less than a fifth (18 per cent) in summer 2009.

However, the good news for financial institutions is that 79 per cent of these card fraud victims were satisfied with the response from their financial institution, up from 75 per cent in 2009.

The UK has a higher instance of card fraud than most other countries surveyed, with a third (33 per cent) of consumers falling victim in the past five years, up from just 27 per cent only 18 months ago, which means an estimated 14.6 million UK consumers have been the victims of card fraud in the last five years. However, these results vary significantly by country – for example nearly half (43 per cent) of people in China have been victims of card fraud, compared to only 11 per cent in the Netherlands.

The research also showed that 50 per cent of consumers worry about card fraud over other financial threats. Yet the survey of 4,200 consumers across 14 countries also showed that too many people fail to take basic precautions for protecting themselves from financial crime. In the UK for instance, nearly one in ten (nine per cent) consumers break the cardinal rule – never carry your PIN number with your card. On average, this figure rises to 12 per cent globally.

There are clearly a lot of stats to take in here. But in essence, what they are telling us is that fraud is a growing issue – and as an industry tackling it remains a major priority. Reassuringly, financial institutions and processors are working tirelessly to combat the crime and protect their customers – and this is paying dividends in terms of customer satisfaction.

But there is also a clear need for further customer education. Banks need to continue to inform consumers about how they can protect themselves against fraud. For example, by driving home the message that you should never carry your PIN with your card.

Interestingly, the UK Cards Association has this week announced that UK card fraud is at a 10-year low. At first this may look at odds to our research, but that may not be the case. Their stats show that the value of cash being stolen is getting lower. This means whereas you might have lost £100 previously, you now only lose £50. But the incidence of fraud is obviously on the up – even if less is being taken each time.

So, as we all work together as an industry to combat this crime, the key thing to remember is that fraud is constantly changing and, looking forward, the industry will need to increase focus on customer education, remedies to safe guard customer identities, verification and authenticating customer payments to improve the overall customer experience.

Andy Morris
Risk Business Solutions Consultant