A record £174.5 million was lost on cards due to fraudulent internet, telephone or mail order purchases in the first half of this year, new figures show.
The growing trend of internet shopping has helped to push up the figure to the biggest half-yearly total ever recorded by Financial Fraud Action UK, which prevents crime on behalf of the financial services industry.
Within the latest half-year total, e-commerce fraud loss is estimated to be £110 million, marking a 23 per cent jump compared with the first six months of 2013.Meanwhile, online banking fraud losses have surged by 71 per cent compared with the first half of 2013. Some £29.3 million was lost due to online banking fraud between January and June this year.
Financial Fraud Action, whose records go back to 1991, said intelligence suggests that criminals are targeting business accounts in particular, which tend to have larger amounts of cash stashed in them.
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.
Recent research conducted for Financial Fraud Action among more than 2,000 people found that one quarter do not take steps to challenge the identity of a cold caller, rising to more than one third (34 per cent) of 18 to 24-year-olds.
Once the victim’s details have been compromised, the criminal can then go on a spending spree with their money, by committing fraud through telephone or online banking and through shopping online. Commonly, fraudsters will target retailers whose internet shopping protections are not adequate, Financial Fraud Action said.
It said deception crimes aimed at people and businesses have been a “key driver” behind the rise in fraud losses. The widespread use of technology such as Chip and Pin and improved fraud screening processes by banks means fraudsters are increasingly concentrating their efforts on obtaining personal details rather than trying to attack banks’ security systems.
Three quarters of Britons (74 per cent) now turn to the internet to do their shopping, according to recent figures from the Office for National Statistics (ONS), while 76 per cent of the population is estimated to go online every day.
Financial Fraud Action also urged consumers to make sure their security software is up to date, to help combat criminals’ use of viruses to steal personal financial information. Software is often available to download free from banks’ websites.
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.”