For the second year running, the UK has seen a drop in the value of online, mail order and telephone order payment fraud. This fell by an estimated 10 per cent to £239 million in 2010, compared with £266 million in 2009, according to fraud prevention group, Retail Decisions (ReD).

Not that fraudsters are cutting back. It’s just more of a challenge for them to get through retailers’ fraud prevention techniques. ReD reports that last year attempted fraud was four times higher than the number of successful fraudulent transactions. Meanwhile, it estimates a further five per cent reduction in the value of CNP fraud in 2011 but the downturn is unlikely to be ongoing and a return to previous growth trends for 2012 is anticipated. Just as the Beijing Olympics saw online fraud rocket in China, London 2012 will have a similar impact in the UK.

Carl Clump, CEO at ReD, stresses: “Fraudsters are continually adapting to overcome fraud prevention techniques and they communicate constantly in the criminal underworld to share scams. So retailers need a fraud prevention strategy that not just keeps pace, but is one step ahead of the fraudsters. To be truly effective a system needs to be able to spot trends as they are emerging - not just identify them once they’re active.”

CNP fraud now accounts for 50 per cent of plastic card fraud losses, compared with around 10 per cent in 1998 when overall fraud totalled just over £100 million.

Share Story: