In 2008, credit and debit card fraud cost the banking industry £609.9 million - an increase of 14% from 2007, according to payments group Apacs. How does credit card fraud happen? Credit card fraud generally occurs when a card has either been stolen or copied. If credit cards are stolen and the bank's not alerted, it's possible for thieves to carry out card-not-present (CNP) fraud - making purchases over the phone, internet or from mail order companies. It's also possible to commit CNP fraud even if the card hasn't been physically stolen. Cloning, or skimming, occurs when an employee of a shop, petrol station or restaurant puts the customer's card into an electronic reading device and steals vital details. Something's phishy Fraud carried out on the internet is often done by a method called phishing. An email or instant message directs users to enter details at a fake website almost identical to the legitimate one. Thieves can also acquire information by sifting through rubbish and extracting private information from receipts and statements - which is why it's so important to securely shred personal documents before recycling. What to do if you think you're a victim of credit card fraud If you suspect fraud has been committed, report your credit card loss to the bank immediately. Most credit card companies will have a 24-hour helpline. It's worth keeping details of this number on your mobile phone. All credit cards are regulated by the Consumer Credit Act 1974, which provides a number of protections and requirements. Both the merchant and credit company are liable for the sale. Most companies will refund any unauthorised purchases between £100 - £30,000, although some charge a maximum £50 excess. Some credit card companies ask users to continue making repayments, including interest accrued, while an investigation is made. This amount is refunded if they reach a conclusion that fraud has been committed. Top tips to prevent credit card fraud * Keep credit cards in a safe place at all times. * Check your statements carefully and question anything that doesn't make sense. * If paying by credit card, don't let it out of your sight. Ensure merchants perform the transaction in front of you. * Guard your PIN while using cash machines and don't be distracted when using them. Never share your PIN with someone else. * Dispose of credit card receipts, cash machine receipts and statements carefully. Use a cross-cut paper shredder for extra safety. * Only use secure, well-known internet sites when making purchases online. Merchants have the option of signing up to services offered by Visa and Mastercard called Verified by Visa and MasterCard SecureCode, which require customers to give additional information to complete a transaction. * Protect your computer against potential viruses, Trojans, worms and spyware. Delete unexpected and unusual emails with attachments before reading them - the virus is usually contained within the attachment. Install good anti-virus and firewall software. Reduce junk mail by introducing an anti-spam filter. * Keep an eye out for missing mail and remember to redirect mail if you move house. If you suspect your post is being stolen, contact the Royal Mail immediately.
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