UK cross-border debit card fraud up 25% in 2014: FICO

The percentage of fraudulent cross-border transactions on UK debit cards grew 25% in 2014, according to a new study by FICO

UK cross-border debit card fraud up 25% in 2014: FICO

The study found that the US accounted for almost half of all fraudulent cross-border transactions on UK debit cards during 2014.

According to the study, cross-border fraud represented nearly a third (31%) of all fraudulent transactions on 52 million active UK debit cards in 2014 compared to 23% in 2013.

The study revealed that 47% of these illegal transactions on UK debit cards occurred in the US, while 24% of debit card transactions took place at cash machines and 12% of fraudulent transactions occurred at cash machines.

FICO reported that fraudulent transactions where the card was not present (CNP) accounted for 68% of all fraudulent debit card transactions, and 84% of cross-border fraud transactions. Also, regarding fraud losses, CNP accounted for 63% of total fraud losses and 57% of cross-border fraud losses.

In 2014, CNP fraud transactions declined by 3% but fraud losses remained flat at £98m between the two periods.

The cards in FICO’s sample accounted 5.6bn total transactions worth £306bn, a 5% rise in spending compared to 2013. The study showed that total fraud losses for the cards in the sample fell 7% to £156m in 2014.

FICO’s fraud chief in Europe, the Middle East and Africa Martin Warwick said: “Criminals are now opting for card-not-present and cross-border fraud. The UK reduced cross-border card fraud from £230m in 2008 down to £80m in 2011. But cross-border fraud has nearly doubled since then, and it’s time to get it back under control.

“We are seeing a lot of fraud in the US as criminals try to exploit the lack of EMV protection before it is implemented in the US, and before the liability shift at the point of sale takes effect later this year. Having EMV will make the magstripe data less appealing to criminals.

“But although most cards in the UK are chip cards, chip transactions from these cards account for only 28% of fraud. As in other markets, fraud has moved online.”

FICO has surveyed 52 million active UK debit cards in its Falcon Fraud Consortium, and tracked trends from 2013 to 2014.