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Total fraud losses for cards issued in the United Kingdom reached £301.7 million (US$535.6 million or 381.4 million euros) in the six months ended 30 June, up nearly 14.5% from £263.6 million for the first half of 2007, according to UK-based payments association APACS. Fraud committed outside the UK accounted for £121.1 million, or 40.1%, of the total and increased by 11.3% from £108.8 million in the first half of 2007. The spread of chip-and-PIN card transactions in the UK, one of the first countries to move to a chip-based card infrastructure designed to reduce fraud, has led to criminals copying cards' magnetic stripe data to produce cloned cards, which they then use in countries with weaker or nonexistent chip-and-PIN systems, APACS says. "Criminals continue to target those areas [that] do not currently have the security benefits of chip-and-PIN," an APACS spokesperson says in a statement. "Fraud abroad will be made more difficult for criminals to commit as more countries roll out chip-and-PIN." Despite the focus on card fraud committed outside the UK, fraud losses inside the country increased 16.6%, to £180.5 million from £154.8 million during the same period a year ago. Fraud losses from card transactions conducted by phone, internet and mail order—also known as card-not-present transactions—increased 18%, to £161.9 million, the group says. APACS notes that more consumers are conducting such transactions, and that the growth rate for that category has declined in recent years. Losses from counterfeit cards increased 22%, to £88.1 million, while losses from lost or stolen cards decreased 11%, to £27.3 million, the group says.
