The boom in contactless payments has fuelled a startling rise in fraud using lost or stolen cards.
Official figures have revealed that fraud on the high-tech credit and debit cards has soared 51 per cent in the past year – with almost 1,000 cases recorded each day.
The rise coincides with the growth in spending on contactless cards, which allow shoppers to pay for up to £30 of goods without entering their security PIN.
The boom in contactless payments has fuelled a startling rise in fraud using lost or stolen cards. Official figures have revealed that fraud on the high-tech credit and debit cards has soared 51 per cent in the past year – with almost 1,000 cases recorded each day
Banks have encouraged customers to use these high-tech cards as a quick and easy way of paying for small amounts of shopping, but critics have warned that they allow fraudsters easy access to someone’s account.
A total of £14million was stolen from contactless cards and devices in 2017 – up from £6.9million the previous year.
Experts said some of the increase in fraud may be down to opportunistic thieves – people who find a missing card and would not try to guess its four-digit PIN but can now use it for payments under £30 using contactless technology.
The total amount spent using the tap-and-go system doubled from £25.2billion in 2016 to £52.4billion last year.
Meanwhile, in the past two years, the number of fraud cases involving credit and debit cards has gone up by 565 a day to 959.
Figures from trade body UK Finance show that while the value of fraud losses has fallen, the number of individual cases has risen significantly, suggesting there are hundreds of thousands more cases a year of fraud for much smaller amounts – typical of contactless card transactions.
While banks have been cracking down on other types of fraud, experts say contactless card fraud has crept up.
Martyn James, from complaints firm Resolver, said: ‘In the past, fraudsters had to work harder to scam our cards, whereas now, as long as they stay under the £30 transaction limit, they can help themselves to your money.
‘Banks have neglected to properly warn customers about the risk of contactless fraud. It’s a dream for a criminal who sees an opportunity for some fast cash.Shoppers have become more complacent and banks need to do more in turn to detect fraudulent behaviour on contactless cards.’
Banks have encouraged customers to use these high-tech cards as a quick and easy way of paying for small amounts of shopping, but critics have warned that they allow fraudsters easy access to someone’s account
The day MPs joined our campaign to save GKN
Politicians from all parties called on ministers to block the takeover of GKN yesterday.
MPs lined up alongside the Daily Mail’s campaign to save GKN and highlighted the defence giant’s critical importance to UK industry during a debate in Westminster Hall organised by Labour’s Adrian Bailey.
Labour MP Jack Dromey, who represents Birmingham Erdington, said: ‘In the aftermath of tragedies like Carillion and British Steel, the last thing we need in an iconic British engineering company is such a problem on pensions befalling workers of GKN.
‘If there is a will there is a way, and I very much hope that the Government will respond to the substantial all-party concern.’
He said the workers at the GKN ‘were the salt of the earth’, adding: ‘There is a pride in their hearts in terms of who they are and what they do.
‘The last thing we want to see is for GKN – the great British engineering company – to become history.’
Rachel Maclean, the Tory MP for Redditch, where GKN is based, added: ‘GKN has a focus on a long-term business model, and this is a welcome contrast to the short-termism that we have seen by Melrose. They are not seen as sustainable long-term investors in the best interests of the company.’
Richard Burden, the Labour MP for Birmingham Northfield, said: ‘The aerospace industry has warned that what happens to GKN is of critical importance to the sector.
‘Melrose’s track record of taking over and selling companies does not give me confidence that their takeover bid would be in the interests of either GKN’s long-term future or indeed the long-term future of British industry.
‘It’s not what Ministers say on this takeover bid that’s important – it’s what they are going to do.’
Mhairi Black, the SNP MP for Paisley and Renfrewshire, told the debate: ‘The Government has the power, the reason and the support to act – the question is, does it have the will?’
Contactless technology was first introduced in the UK in 2007. Banks and building societies issued cards which initially allowed up to £10 to be spent by tapping the card on a machine at the till. Trans-actions could be processed without the four-digit PIN needed in other transactions.
After a slow start, use of the cards took off in 2015 when the cap was increased to £30 and more shops brought in the payment technology. Since then, their popularity has soared.
The number of transactions using contactless shot up from one billion in 2015 to 5.6billion last year. Almost a third of all card transactions last year were contactless.
By 2026, more than half of all debit card transactions will be contactless, according to the UK Cards Association.
Meanwhile, Barclays is trialling cash machines that allow customers to withdraw up to £100 by tapping them with their card.
The amount of money taken from stolen or lost cards fell by £3.8million from 2016 to 2017. Last year criminals took £92.5million – 4 per cent less than the year before. This is the first time in five years that the total value defrauded from these cards fell.
Overall, the value stolen has shot up by 40 per cent since 2012, when £55.4million was lost to this form of card fraud. Banks say the amount lost by contactless accounts for 2.5 per cent of overall card fraud losses. UK Finance describes the £14million value as ‘low’ and said it is equivalent to 2.7p in every £100 spent on contactless cards.
Despite their popularity, concerns about their security have long been raised.
Fears around the security of contactless technology were stoked when five of the UK’s biggest banks admitted that stolen contactless cards can still be used after they have been cancelled by their owner.
The Financial Conduct Authority raised concerns over the ‘weakness in the system’ and proved that some fraudsters have carried on using the cards up to eight months after they had been reported stolen.
Last month, the Bank of England’s chief cashier reignited the debate over contactless fraud when she revealed she does not trust the technology.
Victoria Cleland, whose signature is on every Bank of England note said: ‘I personally don’t really use contactless. I hear stories of friends – this is a personal anecdote, this isn’t the official Bank view – whose money has been taken off contactless when you walk past something.’
A UK Finance spokesman said: ‘Contactless fraud is low, with robust security features in place in every card.
‘At the same time, customers are fully protected against card fraud and will never be left out of pocket, unlike if they lose cash.’