There is no denying that card fraud is a major problem all across the world at the moment. There are many different types of card fraud and a whole range of ways in which a person can be vulnerable to this type of criminal activity. In this report, we are going to take a look at the risk of card fraud, specifically when going on holiday. We will take a look at the countries where card fraud is at its highest, as well as providing you with some other pieces of useful insight.
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.
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.
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.
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.
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.
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.
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.
Find it useful? Please share!
Last updated: 23 January 2020 | © KIS Bridging Loans 2020 |