UK accounts for 45% of Europe’s card fraud as criminals target online transactions

Card fraud across Europe reached €1.55bn last year, with about 45% of that happening to UK consumers and businesses.

Data from BuyShares.co.uk, which provides information to investors, revealed that 2019 saw Є707m worth of card fraud committed in the UK, which is the biggest e-commerce market in Europe.

In comparison, France had the second highest level of card fraud, at Є441m, and Germany the third highest, suffering losses of Є91.5m to the crime.

Over three-quarters (76%) of the fraud in Europe happened through remote purchases, the research found. “The high value of fraud is a result of a high level of using cards for online purchases,” said the report

Card-not-present fraud, where a criminal uses card details without the physical card, continues to increase alongside the growth of e-commerce. Criminals are using sophisticated methods to glean payment card details, including malware and phishing scams.

“In Europe, most cards come with an EMV chip which requires a PIN to be entered into the merchant’s terminal for payment authorisation. However, a PIN isn’t required for online transactions, posing a perfect avenue for fraudsters,” said the BuyShares.co.uk report.

Criminals are also trying to find ways of committing fraud through new payment technologies such as contactless, which has become hugely popular.

“The role of criminal groups has also been taking centre stage in rising card fraud. Such groups use a wide range of methods like the collection of data, threats, and bots,” said BuyShares.co.uk.

Criminal groups are using social engineering and data breaches to steal personal data. Although banks have automated systems in place to identify suspicious transactions, a huge amount of money is stolen every year.

The Covid-19 coronavirus pandemic has boosted online buying – and subsequently increased opportunities for fraudsters. Coronavirus lockdowns have forced more people to carry out day-to-day tasks such as shopping and banking online. Due to the sudden nature of this shift, many users are new to e-commerce, which has given fraudsters some easy targets.

Banks reported an 84% increase in impersonation scams in the first six months of 2020, as criminals exploited the Covid-19 crisis. According to banking trade group UK Finance, banks reported about 15,000 impersonation scans during the period, resulting in the theft of £58m.

Impersonation scams involve consumers receiving an email, text or telephone call from a scammer claiming to be from an organisation such as a bank, the police or government, and asking them to make a payment.

In addition, UK Finance identified that, as a result of home working, there had also been an increase in fraudsters impersonating IT departments or software companies and demanding payments to fix problems with internet connections or attempting to gain remote access to computers.

This week, the UK’s finance regulator, the Financial Conduct Authority, invited fintech companies to join its latest sandbox cohort and a new startup programme which is encouraging innovation around reducing fraud and scams, as part of a focus on helping consumers overcome financial challenges posed by the Covid-19 pandemic.