A security blitz started across the U.K. in September to put a dent in the rising rate of card fraud which hit £135 million last year.
The banking industry, retailers and police work in partnership to beat card fraud, but stepped up their efforts for Card Security Week (September 20-25). This involved an extensive media campaign to urge people to guard their cards, and a mass distribution of posters with information on extra rewards and fraud prevention tips to retail staff. Police also ran special training sessions and visited local retailers to talk about fraud prevention.
Some 75 per cent of card fraud happens over the counter, so retail staff are in a frontline position to help combat card crime by making thorough checks and looking out for suspicious behaviour”, said Melanie Hubbard from Card Watch, the banking industry’s fraud prevention programme.
The rise in card fraud is occurring alongside the growing popularity of plastic cards in the U.K. Around three billion purchases were made with plastic in 1998, a 12 per cent increase over 1997, for the first time exceeding payment volumes of both cheques and automated methods. Growth in card usage has continued similarly in 1999.
The major growth area for card crime is in counterfeit fraud, which increased 50 per cent in the first six months of 1999 compared with the same period last year, and in the last 12 months has caused losses of £33 million. Despite the rapid growth in this area, the most significant losses continue to stem from fraud on lost and stolen cards which cost £70 million in the last 12 months, accounting for up to 46 per cent.
In a major effect to clampdown on card crime, the banking industry is introducing cards with chips embedded in them. This development will drastically reduce counterfeit fraud.
You will start to see chip cards – also known as smart cards – appearing more and more as U.K. cardholders are issued with new cards as old ones expire from early 1999. Chip cards look the same as a magnetic stripe card except they have a gold coloured contact plate on the front.
For the time being the new chip cards will continue to carry a magnetic stripe until cards with the old and the new technologies can be used around the world.
The U.K.’s banks are replacing the 112 million plastic cards already in use and upgrading over 650,000 retail terminals to read chip cards, so many of you will start to see some changes at your sales counters. Already half the U.K.’s 25,000 cash machines have been upgraded to handle chip cards, and the remainder will be upgraded over the next two years.
Meanwhile, other methods of fraud prevention continue to be developed and improved –
- banks use systems which identify unusual spending patterns that differ from the cardholder’s usual routine to help spot fraud.
- authorisation systems are being further developed to help stop fraud on telephone, Internet or mail order transactions.
- the Industry Hot Card File makes information about stolen cards available to retailers to help detect fraud attempts.
- the banking industry is working with the police on a Fraud Intelligence Bureau which investigates a common type of counterfeiting known as “skimming”.
- retail education programmes continue to encourage staff to follow checking procedures to stop fraud, which includes distributing a range of publications.
- banks continue to reward retail staff for their vigilance in fighting fraud, with over eight million pounds awarded last year.
Stop fraud and get a reward
By using extra initiative in making checks or following up on suspicions, you will receive £50 if you retain a card that was being used fraudulently.
So, what sort of things should you be looking for to stop a crooked card transaction –
- check that the number on the card matches the number on the terminal display or printout – if it doesn’t match, the card is probably counterfeit.
- watch the customer as they sign and hold onto the card while this is being done.
- match the signature on the voucher or cheque against the one on the card.
- check the signature spelling against the name on the card, and check that the person presenting the card is the right sex for the name on the card.
- check the “valid from” and “expiry” dates.
If any of your checks leave you feeling suspicious, do not give the card back and make a Code 10 call. But remember, never take risks that might affect your safety or that of your colleagues or other customers.
Card Watch is the banking industry’s campaign which was launched in 1992 by APACS (Association for Payment Clearing Services), to reduce plastic card theft and fraud. It operates in partnership with retailers and the police as well as with organisation such as Crimestoppers.
APACS is the body responsible for matters relating to money transmission and payment clearing activities in the U.K. Its members are the U.K.’s major banks and building societies.