The Worst Holiday Destinations for Card Fraud

First, let's talk about card fraud in general...

A comprehensive study entitled “Fraud the Facts 2019” has been published by UK Finance. This publication has presented a number of insightful yet very alarming statistics regarding card fraud.

It showcased that a number of steps are being taken to protect cardholders, including 24-hour support, yet there is still a lot that needs to be done.

Card fraud is by far the most popular type of fraud, accounting for 56% of all fraud in 2018, with authorised push payments following at 30%, remote banking at 12%, and then cheque fraud at 2%.

What is also worrying is the fact that card fraud is on the rise. In 2018, card fraud losses on UK-issued cards amounted to £671.4 million. Of this, £496.6 million was stolen in the UK and £174.8 million was stolen abroad. This represents a massive increase of 19% when compared with 2017 when a total of £565.4 million was stolen.

Card fraud losses in proportion to how much we spend in total on our cards has also increased. In 2018, 20.4 billion transactions were made, and total spending on all credit and debit cards reached £800 billion. This means that for every £100 spent on a UK-issued debit or credit card, 8.4p was stolen. This is an increase on 2017 where 7p was stolen for every £100 spent.

 

Worst countries in the world for card fraud

In the same report produced by UK finance, the worst five countries in the world for card fraud were also revealed. In 2018, Ireland took the top spot after having the biggest monetary losses due to card fraud on UK-issued cards. Next on the list was the USA, followed by the Netherlands, then Luxembourg and finally Spain.

Given that ATOL have confirmed that the top two holiday destinations for Brits in 2018 were Spain and the USA, chances of holidaymakers falling victim to fraud are significant.

For exact figures, read the full UK Finance report.

 

 

Most common types of card fraud abroad

There are many different tactics and techniques that fraud criminals all around the world are using to gather card data, however there are two methods in particular that you need to be aware of.

Remote Purchase (Card not Present) Fraud

According to UK Finance, 85% of card fraud that occurs overseas is through remote purchase fraud (also known as card not present fraud) at foreign retailers.

This type of fraud occurs when your card information is obtained by the criminal when you are withdrawing cash from an ATM machine or purchasing goods or services. This could be through a criminal installing a tiny ‘skimming’ device to cash machines and Chip and PIN machines, or cases where employees at shops and restaurants save your information whilst you're making a purchase.

This information is then used for fraudulent transactions that don’t require the physical card to be present, for example online or over the phone. This type of fraud often remains undetectable until the victim notices payments leaving their account after checking bank statements. As people don't often check their bank statements when they are on holiday, it could be some time before they notice a problem, possibly making it more difficult to resolve.

Counterfeit Card Fraud

Another common method of card fraud abroad is through counterfeit cards which are created by criminals after stealing the information from the magnetic strip on the card.

Criminals obtain this data through attaching ‘skimming’ devices to the card reader slot of ATM machines and unattended payment terminals (UPTs), such as unattended ticket machines in train stations or car parks. Using the obtained information, the criminal can create a counterfeit card and use it in countries which are yet to upgrade to Chip and PIN.

Read more about the different types of card fraud and how to protect yourself.

Where do you have the best protection against card fraud as a tourist?

If the worst does happen, and you are a victim of fraud while on holiday, you will want to know that you are protected and that you have the best chance of getting your money back and seeing charges brought to the person responsible. Rules and regulations change from country-to-country, so you will naturally experience greater protection in some countries when compared with others.

If you are visiting a country in the European Union, you will be able to get any sort of fraud investigated by the European Anti-Fraud Office (OLAF). This also covers cases where you have received counterfeit euros, which has caused financial damage amounting to at least 500 million euros since the currency was introduced in 2002.

What to do to increase your protection against card fraud

There are a number of things you can do to minimise the risk of you becoming a victim of card fraud, both before you travel and whilst you're away.

Before you go

• First of all you should only take one card away with you and leave the rest at home in a secure place. This way you will minimise the risk of more than one card being stolen/copied.
• Look up what protection you have as a tourist in your chosen location and where you should go/who you should speak to if you fall victim to fraud.
• Add your bank's telephone number to your phone before you go so you have it on hand if you need it to cancel your card. You will need this if your card is physically stolen (as that's where the phone number can usually be found) and you don't have any internet connection to look up the number online.
• Consider getting a pre-paid travel card. You can put as much money as you want on the card before you go which can then be spent like a debit or credit card. Unfortunately, fraud can still be committed against these cards, but they are not linked to your bank account so criminals will only ever be able to steal the balance held on the card and nothing more.
• Before you go, it may be worth telling your bank where you are going and how long for. Number one, this will stop your card from being blocked if they suspect suspicious activity, but you can also set a daily withdrawal limit which means the card will be blocked once you reach that amount. If your card is then stolen, it will stop the criminal being able to spend a limitless amount.

Whilst you're away

• If you can, try to pay for most or all of your expenses whilst you're away in cash - especially in shops, bars and restaurants, and only use your card in emergencies or other times when you genuinely need to. If you only use your card once or twice, you will be significantly reducing your chances of having your card details stolen.
• Using Apple Pay or Samsung Pay is another way to safely use your card if you are in a country that accepts contactless payments. This way you could avoid having to take your card with you at all if you know you don't need to make any larger payments.
• If you need to withdraw cash, use an ATM machine inside a bank as they are far less likely to have been tampered with than an ATM on the street.
• If you're travelling with a partner, carry one card each instead of one person carrying both. This way, if a wallet or purse is stolen, you won't end up losing both cards.