St Valentine's Day saw the second anniversary of the switch from signing for our credit card payments to using chip and PIN cards...
...but has the new system prevented criminals from counterfeiting our details and using our hard-won credit?
The answer from APACS, (the UK payments association), is yes...but fraud is far from dead and we should not drop our guard.
Sandra Quinn, director of communications for APACS revealed the drop in fraud:
"The main aim of chip and PIN was to reduce fraud in the shops and it has succeeded; the cost fell from £218 million in 2004 to £72 million in 2006."
Fraud on lost and stolen cards has also fallen, dropping by 15% in the first half of 2007, compared to the same period in 2005, as cards without PINs are more difficult to use in the UK's high streets and shopping centres.
Sandra Quinn continued by saying:
"Criminals are now more likely to copy the data on our cards and use them in other countries where they don't yet have this protection" "Having said that, it's important to remember that chip and PIN can only protect you as long as you keep your card account information and your PIN private."
But Ms Quinn warns that
fraud when you order by mail,
telephone or on the internet is still increasing; in fact, it rose 44% in the first half of 2007, compared to the first six months of 2005.
"Criminals, like all of us, are using the internet more and more. There are protections in place that help to minimise problems but until all internet retailers around the world adopt the latest systems and practices and understand how to keep our payment data safely, there will always be problems," she says.
Identity fraud is another boom area that has recently attracted attention from organised gangs who are having to work harder now that UK debit and
credit cards are better protected.
The specialist Victims of Fraud team at Experian, Britain's largest credit reference agency, reports that the number of people asking for help rose 68% in the first half of 2007.
ID fraud takes place when a criminal manages to get hold of sufficient personal data (such as bank account details, card numbers, addresses, full names and dates of birth) to impersonate innocent people and borrow money in their names or take over their existing accounts. The result can ruin your credit rating and can take many months to resolve.
Some simple precautions will help to keep your cards (
and your identity) safe, whether you're at home, in another country or surfing in cyberspace.
The first step is to get to know your credit report. This is the personal history of your loans, mortgages and credit cards, your repayment track record, whether you are registered to vote and any bankruptcies, IVAs or court judgments for non-payment of debt. It gives you a snapshot of your credit history and current status and allows you to spot unusual or unfamiliar items, such as a credit card application that you know you didn't make or an account you didn't set up. You can then contact the lenders involved and stop problems before they have a chance to develop.
Getting regular credit reports is such an effective precaution against becoming a victim of fraud that it is now recommended by the Home Office.
You can see your Experian credit report for free with a 30-day trial of CreditExpert, the online credit monitoring and identity fraud protection service from Experian. You will also be alerted every time there is a significant change to your credit report that could indicate attempted ID fraud.
Other preventative measures include:
- Get a free ID fraud risk assessment with checkmyfile.com
- Never write down your PINs or passwords or they could be stolen.
- Don't share intimate financial details with anyone as the more people who know your account details, the more likely they are to be compromised.
- Check bills and statements carefully, looking for any transactions you don't recognise; they could indicate card or identity fraud.
- Shred any sensitive financial documents before throwing them away; criminals raid the bins looking for useful information.
- Don't carry important items around with you if you aren't going to need them; that includes passports, driving licences and even credit cards.
- Never give away bank, card or personal details such as your age, date of birth or mother's maiden name to cold callers or in response to unsolicited e-mails.
- Redirect your post when you move home and always report missing post to the post office in case it is being intercepted.
- Register on the electoral roll at your current address as this helps to prevent fraudsters from impersonating you.
- Report any thefts to the police and suspicious transactions on your accounts to your bank or card issuer.
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