Card Fraud Facts 2001

the facts
Card fraud
2001
the facts 2001
9190 APACS Card Fraud A6.VIS 16/5/01 4:59 pm Page A3
Introduction.................................................................................. 1
Card fraud the facts .................................................................. 2
Shopping on the Internet.............................................................. 4
Types of fraud .............................................................................. 8
Preventing fraud
Chip cards ................................................................................ 13
Identifying cardholders ............................................................ 15
Phone, mail order and Internet transactions .......................... 16
Other initiatives........................................................................ 17
Advice for cardholders .............................................................. 20
Card facts and figures ................................................................ 23
The major players ...................................................................... 25
Useful contacts .......................................................................... 26
Publications.............................................................................. 33
Glossary...................................................................................... 34
Contents
Introduction
1
This booklet has been prepared by the Association for Payment
Clearing Services (APACS) to provide an overview of plastic card
fraud and its prevention.
Card fraud cost the UK 292.6 million in 2000 an increase of
55 per cent on 1999s figure of 188.4 million. Some types of
fraud are growing rapidly, especially counterfeit which grew by
104 per cent last year, and fraud committed without the use of a
card by using the telephone, mail order or Internet which rose
by 94 per cent.
To combat card crime, two things need to be established at the
time of the transaction that the card is the genuine item and
that the person using it is the true owner.
The introduction of highly-secure chip cards in the UK meets
the first part of the requirement by confirming that a card is not
a counterfeit. Chip cards also open up new possibilities for tackling
the second requirement for fraud prevention identifying the
cardholder.
A chip card used with a PIN (personal identification number) is
the preferred option of both retail and banking communities to
reduce card fraud but before a decision can be made the two
industries are working towards resolving a number of issues.
Against a backdrop of shared concern between the banks,
retailers, police and the Home Office, card fraud prevention efforts
also continue on a range of short-term initiatives before the longer
term benefits associated with chip cards can be realised.
9190 APACS Card Fraud A6.VIS 16/5/01 4:59 pm Page 1
2
Card fraudthe facts
280
260
240
300
220
200
180
160
140
120
100
80
60
40
20
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Plastic card fraud losses 1991-2000
Cheque card Debit card Credit/charge card
m
The UK has seen card fraud losses rise steadily in recent years, as
have most countries around the world. In 2000, card fraud cost the
UK 292.6 million. To put the fraud increases in context, it should
be remembered that card usage and the numbers of cards issued
continues to surge in the UK. As a result, fraud losses against
turnover at 0.145 per cent in 2000 are still less than half the
1991 peak level of 0.33 per cent.
The following graph shows the pattern in total fraud losses over
the last decade broken down by card type.
The pattern of fraud shows a steep reduction in losses from the early to mid-1990s, as
a result of a range of partnership prevention initiatives, and then acceleration to 2000 as
criminals adapted their methods of attack and large growths were seen in counterfeit and
card-not-present fraud.
3
The following pie charts illustrate how the trends for card fraud
have changed since 1997, detailing the amounts lost to specific
types of fraud.
The pie charts below show that the proportion of fraud on lost or stolen cards is decreasing
and, to a lesser extent, this also applies to mail non-receipt fraud. Counterfeit and card-not-
present fraud are increasing steeply. (m).
Lost/stolen Mail non-
receipt
Counterfeit
card
Application
fraud
Fraudulent
possession of
card details
Other
Cost 1997: 122 million Cost 1998: 135 million
Cost 1999: 188.3 million
66.2
12.5
20.3
11.9
10
1.2
79.7
14.6
50.3
11.4
29.3
3
Cost 2000: 292.6 million
98.9
17.3
102.8
10.2
56.8
6.5
65.8
12
26.8
14.5
13.6
2.3
4
Whether making a transaction at the point-of-sale, through the
phone, mail order or Internet, card security partly relies upon
cardholder vigilance. If cardholders follow some simple guidelines
when making Internet transactions, it is no different from paying
for purchases by phone or mail order.
Most Internet fraud involves using card details fraudulently
obtained in the real world to make card-not-present transactions
in the virtual world. Currently card-not-present fraud on Internet
transactions is low, accounting for two to three per cent of all card
fraud losses in the UK. From April 2001, the UK banking industry is
rolling out a cardholder address and card security code checking
system to make card-not-present transactions including those
over the Internet more secure (see page 16).
Shopping on the Internet
5
Security of cardholder information
Although the incidence of hackers stealing cardholder data from
websites is very low compared to other ways criminals access card
details, there have recently been some incidents made public by
the media. To protect data, the international card schemes have
stringent criteria for how retailer websites protect and store card
information.
To protect against the low possibility that a hacker will intercept
cardholder data in transit through the Internet, certified
organisations encrypt data as it travels.
As e-commerce develops, the banks continue working alongside
retailers and the international card schemes to add further
security features and develop new banking services to help this
form of trade.
In the long-term, however, it is chip cards (see page 13) that will
play a pivotal role in providing the base for secure e-commerce.
6
Ten-point checklist for Internet shopping
The vast majority of businesses operating on the Internet are
honest and genuine and cardholders need only follow the
guidelines given below to make e-commerce no more risky than
buying by mail order or over the phone.
APACS recommends cardholders use the following ten-point
checklist when shopping on the Internet.
1 Make sure your browser is set to the highest level of security
notification and monitoring. The safety options are not always
activated by default when you install your computer.
2 Two of the most popular browsers are Microsoft Internet Explorer
and Netscape Navigator. Check that you are using a recent version
- you can usually download the latest version from these
browsers' websites. If you have a different browser or use on-line
services such as AOL or Compuserve, contact your ISP or software
supplier to find out how to activate their security features.
3 Keep a record of the retailers contact details, including a street
address and a non-mobile phone number. Beware if these details
are not available on the website. Do not rely on the e-mail
address alone.
4 Click on the security icon to see if the retailer has an encryption
certificate. This should explain the type and extent of security and
encryption it uses. Only use companies that have an encryption
certificate and use secure transaction technology.
Shopping on the Internet (cont)
7
5 If you have any queries or concerns, telephone the company
before giving them your card details to reassure yourself that
it is legitimate.
6 Print out your order and consider keeping copies of the retailers
terms and conditions and returns policy. Be aware that there may
well be additional charges such as postage and VAT, particularly if
you are purchasing goods from traders abroad. When buying from
overseas always err on the side of caution and remember that it
may be difficult to seek redress if problems arise.
7 Check statements from your bank or card issuer carefully as soon
as you receive them. Raise any discrepancies with the retailer
concerned in the first instance. If you find any transaction on your
statement that you are certain you did not make, contact your card
issuer immediately.
8 Ensure that you are fully aware of any payment commitments you
are entering into, including whether you are instructing a single
payment or a series of payments.
9 Never disclose your cards PIN to anyone, including people
claiming to be from your bank or the police, and never write
it down or send it over the Internet.
10 If you have any doubts about giving your card details, find another
method of payment.
8
Criminals use various methods of card fraud. Two thirds of fraud
on UK cards happens in the UK and the rest occurs overseas.
Most of the fraud which takes place abroad is in the United States
(22 per cent of losses on UK cards used abroad), Spain (16 per
cent) and France (15 per cent). Fraud committed abroad on UK
cards increased by 79 per cent in 2000 on the previous years
figure, costing 97.2 million.
Two major factors lie behind the increase. UK fraud prevention
initiatives have driven criminals abroad; and criminals are
increasingly moving quickly and easily from country to country.
APACS and its member banks and building societies are
continuing to work closely with Visa and Europay/MasterCard
on cross-border fraud initiatives.
Descriptions of the types of fraud used by card criminals follow:
Types of fraud
9
1 Counterfeit fraud
Counterfeit card fraud cost almost 102.8 million in 2000, an
increase of 104 per cent on losses of 50.3 million in 1999.
A counterfeit card is either one which has been printed, embossed
or encoded without permission from the issuer, or one which has
been validly issued then altered or re-coded.
Most cases of counterfeit fraud involve skimming, a process
where the genuine data in the magnetic stripe on one card is
electronically copied onto another, without the first cardholders
knowledge. In 1996 skimming accounted for 20 per cent of
counterfeit fraud to amount to almost 3 million in losses. In 2000
card criminals are increasingly organised and as a result the
proportion has grown to over 72 per cent to cost 74 million.
Skimming normally occurs at retail outlets particularly
restaurants and petrol stations where a corrupt employee copies
a customers card details before handing it back, and then sells
the information on higher up the criminal ladder where counterfeit
copies are made. Often the cardholder is unaware of the fraud
until a statement arrives showing purchases they did not make.
It is vital that cardholders check their statements for any
unfamiliar transactions
10
2 Fraud on phone, mail order or Internet transactions
Card-not-present fraud occurs when neither the card nor its
holder is present at the point-of-sale, as happens in telephone,
fax, mail order or Internet transactions. Most of this fraud occurs
through telephone or mail order, and less frequently through the
Internet.
This crime involves using fraudulently obtained card details to
make a purchase. Usually the details are copied down without the
cardholders knowledge or taken from discarded receipts. Less
commonly, card details have been sourced from programmes
which generate account numbers that have been set up on overseas
Internet sites for short periods of time. As with counterfeit fraud,
the legitimate cardholder may not be aware of the fraud until a
statement is received.
A new address and card security code checking system to fight
card-not-present fraud is being rolled out in the UK from April 2001.
Do not discard receipts carelessly and check statements for
any unfamiliar transactions
Types of fraud (cont)
11
3 Lost or stolen cards
Fraud on lost or stolen cards cost 98.9 million in 2000, an
increase of 24 per cent on 1999s losses of 79.7 million. Most
fraud on lost or stolen cards takes place at retail outlets before
the cardholder has reported the loss. Card issuers are continuing
to address this by using intelligent fraud detection systems.
A hot card file system is used to distribute data about lost or
stolen cards to 80,000 retailers in the UK to alert them to cards
reported missing.
It is vital that cardholders report missing cards to their issuing
bank immediately so a block can be put on the card
4 Mail non-receipt fraud
The number of plastic cards stolen in the post peaked in 1991
when it cost the industry 33 million and represented just under
20 per cent of total fraud losses. At this point the banking industry
formed an ongoing partnership with the Royal Mail to monitor and
control card distribution and this has driven the cost of mail non-
receipt fraud down to 17.3 million in 2000.
12
5 Application fraud
Application fraud using stolen or fake ID or other details to open a
card account was reduced by 11 per cent from 1999 to 2000, when
it cost 10.2 million. The success in reducing this type of fraud is
due to the use of CIFAS The UK Fraud Avoidance System and other
detection systems which help spot fraudulent applications.
6 ATM fraud
The majority of cases of ATM fraud occur when the legitimate
cardholder has written down their PIN and kept it with their card
in a purse or wallet which is stolen.
Some cases also occur through shoulder surfing where
criminals look over a cash machine users shoulder to watch them
enter their PIN, then steal the card using distraction techniques or
pickpocketing. ATM fraud cost the industry 17.9 million in 2000,
6 per cent of total fraud losses.
Never write down your PIN and be alert when using
cash machines
Types of fraud (cont)
13
As societys reliance on cards becomes more widespread, the
losses from card fraud grow too. So while the rate of fraud growth
as a percentage of turnover remains low less than half the 1991
peak level of 0.33 per cent it is vital that fraud prevention
methods are continually developed and reviewed as criminals try
to evade them.
Chip cards
Greatly increased security for payment cards
The banking industrys 300 million roll-out of smart chip cards
to fight card crime has become more crucial than ever with losses
at an all time high. The new technology began to be rolled out in
the spring of 1999, with each card issuer distributing the new
cards in accordance with its own business plan, typically as old
cards expire.
A chip card can be recognised by the gold coloured contact plate on
the front of the card, which contains a microchip with highly-secure
memory and processing capabilities. The cardholder can use them
in exactly the same way as existing credit, debit and ATM cards.
Chip cards will still have a magnetic stripe on the back for a number
of years to ensure that cards with old and new technologies can
continue to be used throughout the UK as well as abroad.
The personal data held in a chip card is no different from that held
on the existing magnetic stripe card and covers such things as
cardholder name, card number, expiry date etc. The information is
simply held more securely to safeguard against counterfeit.
Preventing fraud
14
International use
To ensure chip cards are recognised and accepted in all countries
where cards payments are made, countries around the world are
building them to an international specification set by the
international card schemes Europay, MasterCard and Visa (EMV).
The UK is at the forefront of an international roll-out of EMV-
compliant chip technology. By the end of 2002 most of the
bank-owned infrastructure in the UK will be processing chip cards
and it is hoped that the upgrade of retailer-owned equipment will
also be progressed rapidly. Upgrading systems quickly is vital to
fight the steeply-rising rate of counterfeit fraud.
Benefits of chip cards
Initially, the major advantage is increased security against
counterfeit fraud: a rapidly growing crime in the UK and around
the world. Chip technology uses highly sophisticated processing
to identify genuine cards and make counterfeiting much more
difficult and hugely expensive for the criminal.
The new cards have the ability to support add on services such as
retailer loyalty schemes or electronic purse. Chip cards also have
the potential to be used with chip readers attached to personal
computers, mobile phones or digital TVs, making on-line
transactions of the future even more secure.
With the increase in security that chip cards bring, the potential
exists for retailers to expand the use of unattended terminals in
petrol stations, telephone kiosks, car parks and self-scanning at
supermarkets.
Preventing fraud (cont)
15
Identifying cardholders
A new way of identifying cardholders at the sales counter?
Chip technology provides a strong foundation for adopting a better
method of identifying cardholders at the point-of-sale. Using this
technology, the banking and retail industries are assessing the use
of PINs (personal identification numbers).
Using an improved method of identifying the cardholder combined
with the chips ability to verify the card is authentic would
drastically improve security and significantly reduce most types
of fraud.
If PINs are introduced to the retail point-of-sale environment,
it will impact the UKs 42 million cardholders and necessitate a
change in their behaviour at some 735,000 retail terminals. The
massive scale of such a project emphasises the need for the
banking industry, card schemes and retailers to work in
partnership to ensure success.
Why not photo cards?
Putting identification photos on cards has been considered as an
additional security method, but this would only provide costly short
to medium-term relief. The banking industry aims to shift the
responsibility of identifying the cardholder away from point-of-sale
staff by relying on technology-based methods to help prevent fraud.
What about identification methods like iris scanning?
The memory capacity of the chip card makes it possible to retain
biometric details for identifying the cardholder. Finger and iris
scanning and voice recognition have all been promoted as
possibilities, however such technology is not sufficiently reliable
or cost effective to meet the requirements of the UK card industry
within the next ten years.
16
Systems to fight fraud on phone, mail order and Internet
transactions
To combat the rapid rise in card-not-present fraud seen in the last
few years, the UK card industry has developed a system which will
be implemented by the international card schemes MasterCard,
Visa and American Express from April 2001.
The automated system will allow merchants who accept
transactions via the phone, mail order or the Internet to verify the
billing address of a cardholder and cross-check a card security
code. Cardholders will be asked to provide their full statement
address and the last three or four digit number known as the
Card Security Code printed on or just below the signature panel.
The system will have a significant impact as in the majority of
cases, where a fraudster only has access to a receipt containing
card details, they would not be able to provide the real cardholders
address and the code on the back of the card.
These checks will provide additional information to the merchant
to help them assess the potential fraud risks and decide whether
to proceed with the transaction. The new system will reduce and
deter this fraud type, while also helping to open up business
opportunities for retailers.
The system will initially be provided to the more fraud-prone card-
not-present retailers, where transactions will be monitored to
assess the systems effectiveness.
17
Knowledge-based systems
Checking for unusual spending patterns to spot fraud before
it is reported
Banks, building societies and card schemes are continually
increasing the sophistication of intelligent detection systems
which can identify fraudulent transactions before a cards loss is
reported. The majority of card issuers already use knowledge-
based systems and have had considerable success in identifying
spending patterns which differ from the cardholders normal
routine.
CIFAS the UK Fraud Avoidance System
Sharing information to stop fraud
CIFAS is an information exchange that helps its wide range of
member organisations identify different types of fraud, including
that relating to false applications for plastic cards.
Lower floor limits
Online checks to ensure cards have not been reported lost
or stolen
Most retail outlets have a floor limit an amount above which they
will seek authorisation from the card issuer before completing a
transaction. Retailers have been encouraged to introduce lower
floor limits since the early 1990s and the number of authorised
transactions has increased from around 10 per cent to around
65 per cent.
These days the majority of fraud is authorised because criminals
are using cards fraudulently before the owner reports it. This
highlights the importance of cardholders reporting lost or stolen
cards immediately so they can be blocked, and of checking
statements regularly to look for any unrecognised transactions
which could indicate card-not-present or counterfeit fraud.
18
The Industry Hot Card File (IHCF)
Checking every card transaction for lost and stolen cards
Retailers subscribe to this electronic file which distributes data on
lost or stolen cards. When a card is swiped as part of a normal
transaction, it is automatically checked against the file and an
alert is given if the cards details match those on file.
The IHCF contains information on five million missing cards and is
used by more than 80,000 participating retailers in the UK. During
2000 some 280,000 cases of attempted fraud were prevented using
the system. The payments industry is actively encouraging
extension of its use both in the UK and abroad, where it will help to
combat cross-border fraud.
Helping retailers fight fraud
Training and then rewarding retail staff for stopping fraud
A major new retailer training initiative, run on behalf of the UK
banking industry in close collaboration with retailers, police and
other organisations including Crimestoppers, is educating retail
staff about how to identify and prevent card fraud attempts.
The Spot & Stop Card Fraud programme is targeting retailers in
the top eight fraud-prone areas that account for around 40 per
cent of all UK-based fraud (currently London, Manchester,
Birmingham, Leicester, Glasgow, Edinburgh, Leeds and Croydon).
This initiative is part of a wider, ongoing retailer education
programme which includes producing a range of free publications
and raising fraud prevention awareness through initiatives like a
Card Security Week held each September.
UK card issuers run a retailer reward scheme which paid out more
than 10 million in 2000 to staff who retained cards that were
being used fraudulently.
19
Working with the police
Exchanging information to fight fraud
Working with the police is essential in fighting card fraud,
particularly the organised criminals largely to blame for the UKs
surge in plastic card fraud.
Organised criminals often use sophisticated methods of card
crime as a comparatively low risk way of raising revenue that later
funds more violent crime. Criminals behind offences like drug
trafficking, kidnapping, smuggling and terrorism are often also
involved in card crime.
Fraud Intelligence Bureau (FIB)
The FIB based at APACS shares information and intelligence
between the banking industry and police to combat counterfeit
skimming. It has helped destroy several major counterfeiting rings
run by organised criminals.
The FIB is further developing its role as a leading centre for
exchange of information and intelligence between police and the
banks on all types of card fraud.
APACS also provides speakers for police training courses as well
as education materials. At an operational level, the banks and
building societies liaise with the cheque and credit card squads
regarding criminal activity and specific investigations.
Organised criminals often use sophisticated methods of card
crime as a comparatively low risk way of raising revenue that
later funds more violent crime. The penalties for card
criminals are generally substantially lower than, for example,
drug dealers.
David Cooper, Chairman of the Plastic Fraud Prevention Forum
20
Educating cardholders about how to prevent fraud
The Card Watch campaign aims to increase awareness among
cardholders of what they can do to prevent fraudulent use of
their cards.
Card fraud results in inconvenience to the cardholder which could
include the theft of other possessions kept with cards, like keys
and diaries.
While UK codes and legislation makes cardholders potentially
liable for the first 50 of fraudulent losses before their card is
reported lost or stolen, in practice the bank or building society will
usually refund the full amount lost. If a cardholders details are
compromised as in counterfeit skimming or many card-not-
present frauds, there is no liability.
Card Watch offers the following advice to cardholders.
Advice for cardholders
21
1 Guard your cards. Dont let them out of your sight
when making a transaction.
2 Dont carelessly discard receipts from card
transactions.
3 Check your receipts against your statements
carefully. If you find an unfamiliar transaction,
contact your card issuer immediately.
4 Never write down your PIN and never disclose it to
anyone, even if they claim to be from your bank or
the police.
5 Report lost or stolen cards to your bank or building
society immediately.
6 When using a cash machine, be wary of anyone
trying to watch you enter your PIN and do not allow
yourself to be distracted.
7 Sign any new cards as soon as they arrive. Ensure
that you cut up the old cards immediately the new
ones become valid.
8 Dont keep your cheque book with your cards.
Top tips
22
9 If you use a bag, carry it firmly with the clasp
towards you. A money belt or secure inside pocket
is best for valuables.
10 Dont leave cards unattended in a bag, briefcase or
jacket in a public place and keep your bag or
briefcase on your lap. If you have to put it on the
floor, secure the strap.
11 In pubs or restaurants, dont leave your cards in
jackets or handbags over the backs of seats.
12 Never leave plastic cards or other valuables in a
parked car.
13 Keep wallets and bags out of sight when driving.
14 At work, keep your bag and other personal
belongings locked in a cupboard or drawer.
15 When on holiday, dont leave valuables unattended
in your accommodation, on the beach or by the
pool. Use a hotel safe if available.
16 Consider registering with a card protection scheme
particularly if you have several cards. Contact
your card issuer for details.
Advice for cardholders when using the Internet to
make a purchase is covered on page four.
Also
23
Credit cards were first issued in the UK in 1966 and debit cards
in 1987.
Since then, card usage has grown every year: in the past five years
the number of cards in issue has grown by 32 per cent. Today there
are more than 42 million cardholders in Britain and almost 127
million plastic cards including credit, charge, debit, cash (ATM
only) and cheque guarantee cards.
89 per cent of adults hold one or more plastic cards
56 per cent of adults hold a credit/charge card
84 per cent of adults hold a debit card
Credit and debit card purchase volumes are
expected to more than double in the next ten years
The first ATMs were introduced in 1967. The early
machines had limited functions, dispensing fixed
amounts of cash in exchange for tokens. It was only
in the mid 1970s that magnetic stripe cards were
used to withdraw cash
There are 31,000 ATMs in the UK
Card facts and figures
24
On an average day there are around 5.5 million
cash withdrawals from ATMs (about 2 billion in
total during 2000)
The average ATM withdrawal is 56
The average ATM-user visits an ATM once a week
The average annual spend per credit card is
approximately 1,500
The average purchase on a credit card at a retail
outlet is around 52
Nearly six billion transactions were made with
plastic in 2000
Around 160 billion was spent by UK cardholders
in UK card-based retail transactions in 2000
In 2000, the average total loss per lost or stolen
credit or debit card used fraudulently was 435
292.6 million was lost to card fraud last year
Nearly 67 per cent of all fraudulent card use in
the UK takes place at the retail point-of-sale
Card facts and figures (cont)
25
The major players in card fraud prevention are the banks, retailers
and police. Their continuing efforts focus on developing tougher
measures that are both effective at combating fraud and realistic
from an operational point of view.
Leading the fight against fraud is the APACS Plastic Fraud
Prevention Forum (PFPF), comprising representatives of all the
major card issuers in the UK and the card schemes including Visa
and Europay/MasterCard. Its role is to develop and implement
strategies to prevent card fraud. Card Watch, the public awareness
campaign, was set up by the PFPF in the early 1990s as the focus
of the industrys activities to combat plastic card fraud.
The PFPF have regular meeting with key figures from the major
retailer associations, the police and Home Office.
The major players
26
APACS
Main Switchboard Number ..........................................020 7711 6200
Richard Tyson-Davies ..................................................020 7711 6234
publicaffairs@apacs.org.uk
www.apacs.org.uk
APACS MEMBER BANK AND BUILDING SOCIETY CONTACTS
ABBEY NATIONAL
Media Relations Office..................................................020 7612 4979
Media Relations Fax Number ......................................020 7612 4738
christina.mills@abbeynational.co.uk
www.abbeynational.co.uk
ALLIANCE & LEICESTER
General Press Office Number ......................................020 7396 6429
Press Office Fax Number..............................................020 7396 6466
Michelle.pegley@alliance-leicester.co.uk
www.alliance-leicester.com
BANK OF ENGLAND
press@bankofengland.co.uk
www.bankofengland.co.uk
BANK OF SCOTLAND
Press Office Number ....................................................0131 243 7077
alistair_ross@bankofscotland.co.uk
Useful contacts
27
BARCLAYCARD
Mark.gonnella@barclaycard.co.uk
www.barclaycard.co.uk
BARCLAYS BANK
Retail Financial Services Communications
Retail Press Office ........................................................020 7699 2387
Fax Number: ................................................................020 7699 3644
louise.footner@barclays.co.uk
www.barclays.co.uk
CAPITAL ONE
Press Office ..................................................................0115 843 3174
Fax Number ..................................................................0115 843 3388
Richard.holmes@capitalone.com
www.capitalone.co.uk
CITIBANK
Stephen.goldman@citibank.com
www.citigroup.com
28
CLYDESDALE BANK
gordon.macmillan@eu.nabgroup.com
www.cbonline.co.uk
CO-OPERATIVE BANK
General Press Office Fax Number................................0161 839 4220
dave.smith@co-operativebank.co.uk
www.co-operativebank.co.uk
COUTTS GROUP
julie.a.cooper@coutts.com
www.coutts.com
HALIFAX
markhemingway@halifax.co.uk
www.halifax.co.uk
Useful contacts (cont)
29
HFC BANK
Press Office Fax ............................................................01344 892 646
patrick.long@hfcbank.co.uk
www.hfcbank.co.uk
HSBC HOLDINGS
(includes HSBC Bank, HSBC Asset Management
HSBC Investment Banking and the HSBC Group worldwide)
General Press Office Number ..................................020 7260 8206/7
Press Office Fax Number ....................................020 7260 8215/9478
Out-of-hours pager numbers for duty press officers:
0941 105821/105914
pressoffice@hsbc.com
www.hsbc.com
LLOYDS TSB BANK
Mary.walsh@lloydstsb.co.uk
www.lloydstsb.com
MBNA INTERNATIONAL BANK
General Press Office Number ......................................01244 672144
Karen.noble@mbna.com
www.mbna.com
30
NATIONAL AUSTRALIA BANK
ken.pipe@eu.nabgroup.com
www.trading.national.com.au
NATIONWIDE BUILDING SOCIETY
pressoffice@nationwide.co.uk
www.nationwide.co.uk
NATWEST GROUP
Retail Bank Press Office ..............................................020 7920 5847
jayne.goodwins-miller@rbs.co.uk
www.natwest.co.uk
NORTHERN ROCK
Ron.stout@northernrock.co.uk
www.northernrock.co.uk
31
THE ROYAL BANK OF SCOTLAND
Retail Bank Press Office ..............................................020 7920 5847
jayne.goodwins-miller@rbs.co.uk
www.rbs.co.uk
WOOLWICH
Retail Press Office ........................................................020 7699 2387
Fax Number ..................................................................020 7699 3644
louise.footner@barclays.co.uk
32
CARD SCHEMES CONTACTS
VISA INTERNATIONAL
Barderr@visa.com
www.visa.com
MASTERCARD/EUROPAY INTERNATIONAL (Brussels)
General Press Office Number ..................................00 32 2 352 5647
Press Office Fax Number..........................................00 32 2 352 5732
www.mastercard.com
SWITCH
scsl@switch.co.uk
www.switch.co.uk
AMERICAN EXPRESS
Jacqueline.a.goozee@aexp.com
www.americanexpress.com
DINERS CLUB
C/o General Press Office Number................................020 7986 5602
Stephen.goldman@citibank.com
33
All available from: APACS Public Affairs Request Line,
020 7711 6359 or publicaffairs@apacs.org.uk
Plastic Card Review (50 charge except for journalists)
An annual publication providing a comprehensive analysis of
trends in plastic card use in the UK over the last seven years.
Fraud in Focus
An annual publication offering an overview of fraud trends and
current fraud prevention initiatives (available in pdf format from
www.cardwatch.org.uk).
Spot & Stop Card Fraud pack
A collection of fraud prevention literature for retail point-of-sale
staff, including a four step guide to spot and stop card fraud
designed to be kept at the sales counter. Free packs can be
ordered from the Card Watch Information Office on 08705 500 005,
or visit www.cardwatch.org.uk.
Publications
34
Acquirer (merchant acquirer)
The bank or other financial institution which has a contractual
agreement with a merchant. The acquirer handles/processes debit
and credit card transactions received, reimbursing the merchant
for the amount of the sale and levying a service
charge/commission for the service.
Authorisation
The process whereby a merchant (or a cardholder through an ATM)
requests permission for the card to be used for a particular
transaction.
Automated Teller Machine (ATM)
A computerised self-service device permitting the holder of an
appropriate card and PIN to withdraw cash from their account and
access other banking services. Also known as a cash machine,
cash dispenser or hole-in-the-wall machine.
Biometrics
Biometric methods of identification work by measuring unique
human characteristics as a way to confirm identity, for example,
finger or iris scanning or dynamic signature verification.
Card Authentication Method (CAM)
The means by which a plastic card is determined genuine and not
counterfeit. The chip card provides the best CAM available.
Card issuer
The bank, building society or other financial institution which
issued the card and which has a contractual relationship with the
cardholder.
Glossary
35
Card-not-present (CNP)
Transaction where the merchant does not have physical access
to the card (e.g. through telephone, mail order or Internet
transactions).
Card schemes
Organisations which manage and control the operation and
clearing of transactions. Banks and building societies must be
members of the appropriate schemes to issue cards and acquire
card transactions. Examples of schemes are:
MasterCard/Europay, Visa, Switch, American Express, Diners Club
International.
Card Security Code
The last three or four digits of a number printed on or just below
the signature panel on payment cards this code was formerly
called the CV2.
Cardholder Verification Method (CVM)
The means by which the presenter of the card may be identified as
genuine, for example a signature or PIN.
Chip card
A plastic card containing a microchip which has highly secure
memory and processing capabilities, which can be recognised by
the gold coloured contact plate on the front of the card. Chip cards
are also known as integrated circuit cards (ICCs) or smart cards.
CIFAS The UK Fraud Avoidance System
CIFAS is an information exchange that helps its wide range of
member organisations identify different types of fraud, including
that on plastic cards.
36
Counterfeit card
A card which has been printed, embossed or encoded so as to
appear to be a legitimate card OR a card which has been validly
issued but subsequently altered or re-encoded.
Cross-border fraud
Fraud perpetrated on a plastic card, or using a card number, in a
country other than the country of issue.
CVC/CVV
Card Verification Code (MasterCard)/Card Verification Value (Visa).
Encrypted numeric value contained in the data on the magnetic
stripe which can be checked to ensure that the information has not
been altered in any way.
Electronic commerce
Transactions which are conducted over an electronic network
where the buyer and merchant are not at the same physical
location e.g. plastic card transactions via the Internet.
Electronic purse
Also known as e-purse, this is a multi-purpose pre-paid card
which contains electronic value exchanged for goods and services.
It can be disposable or reloadable.
Encryption
A method of making information secret, so that only a person who
knows the necessary key or password can understand or decrypt
the information.
Floor limit
A limit agreed between the merchant and acquiring bank for each
sale above which authorisation must be obtained by the merchant.
Glossary (cont)
37
Fraud Intelligence Bureau (FIB)
A rapid response unit based at APACS that shares information
between the banks and police to combat counterfeit fraud.
Industry Hot Card File (IHCF)
Computerised list of lost or stolen cards, for use by merchants.
Intelligent detection systems
Computer systems developed by the banking industry to help
identify fraudulent card use. Also known as knowledge-based
systems and neural networks.
Skimming
The most prevalent form of counterfeit fraud whereby a cards
magnetic stripe details are electronically copied and put onto
another card.
The Association for Payment Clearing Services (APACS) is the
industry body for the major UK banks and building societies
for non-competitive areas of money transmission, including
card payments.
The APACS Plastic Fraud Prevention Forum (PFPF) represents
all of the UKs major card issuers and works to develop card
fraud prevention initiatives. Card Watch is the PFPFs public
awareness campaign and the focus for co-ordinated activities
to combat card fraud.
For further information about Card Watch visit
www.cardwatch.org.uk, phone 020 7711 6356
or email cardwatch@apacs.org.uk.
APACS (Administration) Ltd 2001
Mercury House, Triton Court, 14 Finsbury Square, London EC2A 1LQ
(T) 020 7711 6200 www.apacs.org.uk

Card Fraud Facts 2001

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