Credit and debit card fraud rose to over £500 million in 2004 despite the introduction of new chip-and-PIN technology.

It was hoped that the new chip-and-PIN technology would reduce fraud but figures recently produced by the Association for Payment Clearing Services (Apacs) indicate a 20% increase in theft using credit and debit cards. It also estimates that, without chip and PIN, losses could reach £800 million by the end of 2005.

On average 100,000 cards are posted every day but many never reach their destination. A 60% increase in the interception of cards by criminals is costing the banking industry £73 million a year. The banking industry is working closely with Royal Mail in an effort to monitor the situation but the evidence would seem to indicate that much more is still required.

Internet, phone and mail order fraud, using credit card details soared to £150 million in 2004 whilst fraud at cash machines increased to over £70 million.

It is widely claimed that chip-and-PIN cards provide increased anti-fraud measures but there is still no deadline for its implementation. 1 in 3 cards currently issued are without the chip-and-PIN technology and 15% of retailers have yet to install tills that allow its use even though they have been liable for any fraudulent use of cards since January 2005.

Advice from Apacs is that chip-and-PIN is still more secure than signature only cards and the more widely used the more difficult it will be for fraudsters but that cards must be kept secure in all environments.

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