Contactless Fraud Losses Double But Remain Low
The value of contactless card fraud has almost doubled in the UK over the past year, although still remains a tiny fraction of overall card losses, according to Action Fraud.
The national fraud reporting service claimed that there were 2739 reports of contactless fraud in the first 10 months of the year, costing victims nearly GBP1.2m. That’s up from 1440 cases with a value of GBP711,000 in the same period in 2017.
Losses ranged on average from GBP90 all the way up to GBP625. The largest single amount stolen was GBP400,000 — which would require a large number of tap-and-go payments on the part of the fraudster, as there’s a GBP30 maximum limit on each transaction.
Although there have been widely reported concerns about the possibility of fraudsters using fake readers to extract data from contactless cards, the reality is different, according to UK Finance.
The banking lobby group claimed last year that “no contactless fraud has been recorded on cards still in the possession of the original owner.”
Instead, it’s believed that most fraud via this channel happens when cards are stolen from the victim.
Whereas in the past reports have suggested criminals had a long window of opportunity before cards were finally cancelled, that too has changed, according to UK Finance.
“Technical changes have since been introduced, resulting in the majority of contactless transactions going online, meaning the transaction is authorized directly with the card issuer and an attempted purchase with a cancelled card would be declined,” it said.
It’s also true that contactless fraud remains low relative to overall card spend and total fraud levels.
UK Finance’s fraud round-up for the first half of 2018 claimed that contactless fraud represented just 3% of overall card fraud during the period.
“Fraud on contactless cards and devices remains low with GBP8.4m of losses during the first half of 2018, compared to spending of GBP31.9bn over the same period,” it revealed. “This is equivalent to 2.5p in every GBP100 spent using contactless technology, the same as it was in the first half of 2017.”
This post Contactless Fraud Losses Double But Remain Low originally appeared on InfoSecurity Magazine.
