Card Not Present Fraud Cases rocket by 12% in 2020

A new report detailing the facts surrounding the challenge of fraud in the UK, has been released by the collective voice for the banking and finance industry, UK Finance.

The Fraud The Facts 2021 report highlights that unauthorised financial fraud losses across payment cards, remote banking and cheques totalled £783.8 million in 2020.

Investment by the finance industry in advanced security systems to protect customers prevented more than £1.8 billion of unauthorised fraud, but criminals still successfully stole over £1.26 billion through fraud and scams in 2020 (45% of this was attributed to payment card fraud). A total of £983 million in card fraud was stopped by banks and card companies in 2020, a fall of two per cent compared to 2019.

Updated Fraud Figures Released

The report continues to detail that 79% of card fraud on UK issued cards is conducted in Card Not Present (CNP) channels, as the Covid-19 pandemic saw criminals ruthlessly adapt and evolve their methods to take advantage of the increase in remote/homeworking.

Fraud Types

This saw card fraud cases rocket to record levels with 2,835,622 reported cases, with 2,417,866 coming through CNP Channels, representing a 12% spike in reported CNP cases against 2019.

Katy Worobec of UK Finance

Katy Worobec, Managing Director, Economic Crime at UK Finance summarises within the report ‘2020 was a year of unprecedented challenges, as the Covid-19 pandemic dramatically transformed our everyday lives and lockdown restrictions significantly impacted on the economy.

Criminals are also adapting to the rise in online shopping and remote working. While families and businesses have struggled, the criminal gangs behind economic crime have been quick to capitalise from the pandemic by tailoring scams to fit our changing lifestyles due to the pandemic.

The banking industry funded Dedicated Card and Payment Crime Unit arrested over 100 fraudsters during the year, including criminals involved in Covid-19 scams.’

Steven Jones, Commercial Director at Gala Technology, the innovative Yorkshire-based company behind the secure and PCI DSS compliant 'Cardholder Not Present' payment solution, SOTpay commented ‘Given the unique challenges we have all faced in 2020, I am not surprised to see reported cases of CNP fraud rise, but on a more positive note, fraud losses on UK-issued payment cards totalled £574.2 million last year, an eight per cent decrease from £620.6 million in 2019.

This suggests that card issuers are identifying and stopping individual incidents more quickly and technologies such as SOTpay are playing their role, by supporting merchants to process, secure, authenticated and PCI compliant transactions, embracing Strong Customer Authentication where possible, even for telephony payments.

Jones continued ‘E-commerce CNP fraud equated to 83% of all remote purchase fraud in 2020. With the deadline for the phased implementation of PSD2 and of Strong Customer Authentication now set by the FCA for the 14th September 2021, these new rules aim at reducing fraud by verifying a customer’s identity during remote transactions. Whilst it is expected that the gross losses will further decline, many within the payments ecosystem believe that the fraudsters are not going to stop, they will simply look to expose the weakest link in the commerce chain, which will be Mail Order/Telephone Orders (MOTO).’

You can download the entire UK Finance report here:

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