Page 19 - The UK Cards Association Annual Report 2012

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THE
UK
CARDS
ASSOCIATION
ANNUAL REPORT
2012
19
The UK Cards Association is one of the main supporters
of Financial Fraud Action UK
(FFA UK), the name under which
the financial services industry co-ordinates its activity on
fraud prevention.
UK card fraud is showing an encouraging
sustained decline from its peak in 2008.
However, this good news is no reason to be
complacent. Whilst industry measures have
made fraud harder to perpetrate, latest
intelligence suggests that fraudsters have
reverted to more basic means of fraud using
distraction techniques and social engineering
methods to get hold of people’s card or phone
banking details.
During 2011 The UK Cards Association
maintained its financial sponsorship of the
Dedicated Cheque & Plastic Crime Unit
(DCPCU) first established in 2002. This is a
unique proactive police unit formed as a
partnership between the payments industry,
City of London Police, Metropolitan Police and
the Home Office. Since its inception the DCPCU
has recorded fraud savings in excess of £368
million and counting. In 2010 alone, the last
full year for which figures are available, the
DCPCU generated savings of more than £28
million, arresting 53 suspects and disrupting
22 organised criminal gangs.
Established in 2010, the industry’s Financial
Fraud Bureau (FFB) continued its role in
proactively seeking intelligence about all
payment fraud from a wide range of intelligence
sources, providing the most comprehensive and
up-to-date picture of the payment fraud
landscape. The intelligence has been used to
inform collaborative work across the industry
and with other partners, such as the police. In
addition the FFB:
• Supports and co-ordinates the Strategic
Fraud Threat Assessment Process, adopted
by the industry in 2009 to drive and
prioritise industry fraud prevention and
control strategies; and
• Manages the Fraud Intelligence Sharing
System (FISS), a central intelligence data
sharing system that helps identify linkages
across all types of payment fraud, including
card fraud.
Members who have fully exploited FISS,
submitting a wide range of fraud information
to the systems which is then available to
other members, have derived significant
financial benefits – those reporting figures
estimate savings to November 2011 of
c£3.4 million. The system fits well with the
broader anti-fraud initiatives across the UK,
being a key input of the payment industry’s
combined fraud intelligence data into the
Government’s National Fraud Intelligence
Bureau. The industry is now investigating
opportunities to share the information held
by FISS with other market sectors.
During 2011 the UK card industry continued
to pursue a range of strategies aimed at
preventing fraud, including:
• Wider rollout and use of online fraud
prevention solutions such as Verified by
Visa, MasterCard SecureCode, cardholder
address verification (AVS) and card security
codes (CSC);
• Continued support for the BeCardSmart
campaign;
• Encouraging merchants to make use of
card-not-present fraud prevention tools,
such as intelligent fraud detection software,
available from third-party providers;
• Increasing the effectiveness and
sophistication of intelligent fraud-detection
systems that can identify unusual spending
patterns;
• Working with the Identity Fraud
Communications & Awareness Group
of industry bodies to promote best practice
guidelines to consumers and businesses
on how to avoid becoming a victim of
ID theft;
• Consumer research to look at what
consumers understand about card fraud
and what more they would like to know;
• Running of a targeted ‘money mule’
campaign aimed at creating awareness
in money mule recruitment hotspots in
East London; and
• Raising awareness through the media
and campaigns amongst vulnerable
consumer groups of current fraud scams
and the steps individuals can take to
protect themselves.
N
Annual Fraud Losses on UK-Issued Cards 2005-2010 (£ millions)
Fraud Type
2005
2006
2007
2008
2009
2010
Card-not-present
183.2
212.7
290.5
3283.4
266.4
226.9
Counterfeit
96.8
98.6
144.3
169.8
80.9
47.6
Lost/stolen
89.0
68.5
56.2
54.1
47.7
44.4
Card ID theft
30.5
31.9
34.1
47.4
38.2
38.1
Mail non-receipt
40.0
15.4
10.2
10.2
6.9
8.4
TOTAL
439.4
427.0
535.2
609.9
440.0
365.4