While the three years since chip and PIN's introduction have seen a cut in the UK's card-fraud rate, criminals in European countries — where the technology has yet to be rolled out — are siphoning millions of pounds from UK consumers' cards.
According to payments-industry body Apacs, the amount UK retailers lose to card fraud has dropped by around a third since the chip and PIN technology was adopted in 2005, now standing at £47.4m for the period between January and June this year.
In contrast, £121m was lost during the same period to foreign card fraud, up 11 percent on last year and nearly 190 percent on three years ago. The fraud is occurring mainly in European countries where chip and PIN has not been rolled out and where criminals will typically use stolen UK card details at retailers and ATMs, Apacs said.
Chip-and-PIN cards are expected to be rolled out in Europe by 2010. In the meantime, Apacs recommended consumers sign up to secure online-payment services such as Verified by Visa and MasterCard SecureCode, which currently have around 25 million users in the UK.
Criminals are also targeting other channels where they can make transactions without chip and PIN, including phone, internet and mail order, where fraud increased to £161.9m, up 18 percent on last year.