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Customers urged to be vigilant as card fraudsters increase scam attacks

New figures released by Financial Fraud Action UK show that card and remote banking fraud increased during the first six months of 2014. The intelligence behind the figures reinforces recent trends, which have seen the growth of deception crimes seeking to persuade consumers to part with their personal and financial information, as well as criminals’ use of computer viruses. As a result, customers are being warned to remain vigilant and aware of the key warning signs of scams.

Fraud losses on UK cards totalled £247.6 million between January and June 2014, an increase of 15% from £216.1 million during the same period in 2013. Fraud as a proportion of card purchases has remained flat at 7.4 pence for every £100 spent, the same proportion as the industry reported at the end of 2013.

Losses on remote banking fraud rose to £35.9 million, up 59% from £22.6 million in 2013. Within this total, online banking fraud losses rose to £29.3 million, a growth of 71% from £17.1 million in 2013. Telephone banking fraud rose to £6.6 million, up 20% from £5.5 million. Intelligence suggests criminals are targeting business accounts which typically allow higher value fraudulent transactions.

Losses due to remote card purchases (those made online, over the telephone or by mail order) rose to £174.5 million in the first six months of 2014, up 23% from £142 million in the same period in 2013.

Within this total, the e-commerce fraud loss is estimated to be £110 million, up 23% from an estimated £89.5 million in the first half of 2013. While significant, this rise needs to be viewed in the context of the increase in Internet shopping by British consumers, with spending up from an estimated £40.5 billion in the first half of 2013 to an estimated £47 billion in the same period in 2014 (according to IMRG). Card payments are the main driver of online spending growth as they provide the most effective way to pay online.

Card fraud rises, but as a proportion of spending remains flat at 7.4 pence for every £100 spent during the first half of 2014

Card fraud rises, but as a proportion of spending remains flat at 7.4 pence for every £100 spent during the first half of 2014

Growth of deception crimes

A key driver for the rise in fraud losses has been the growth of deception crimes aimed at individuals and businesses. A combination of Chip and PIN and advanced fraud screening detection processes used by the banks drove a long-term decline in card fraud up to 2012. This is illustrated by the 72% decline in High Street fraud losses between 2004 and 2013. In response, fraudsters are increasingly concentrating their efforts on obtaining personal and financial details from individual customers rather than attacking the security systems used by the banks.

An increasing problem has been criminals telephoning people at home while posing as the bank, police or representatives of other trusted organisations such as Government departments. These cold calls typically involve the fraudster tricking their victim into revealing personal or financial information, such as their four-digit PIN or online banking details, transferring money to another account or accepting a courier into their home to pick up their card.

Once details have been compromised, they are then used to commit fraud through both remote (telephone or online) banking channels and via shopping online.

Commonly, fraudsters target retailers who have not introduced adequate Internet shopping protections. Research conducted by the ICM for Financial Fraud Action UK (FFA UK) showed that a quarter (25%) of customers do not take steps to challenge the identity of a cold caller, with this figure rising to 34% of 18-24 year-olds. To stop these scams, police and fraud experts are highlighting the key warning signs.

Your bank will never:
*Call you and ask for your four-digit PIN or your full online or telephone banking security codes over the phone
*Ask you to withdraw money to hand over to them, or to transfer money to another account (even if they say the account is in your name)
*Come to your home to collect your cash, payment card or cheque book
*Ask you to purchase goods using your card and then hand them over for safe keeping

Intelligence also shows criminals are using computer viruses to steal personal and financial information which is then used to commit fraud. FFA UK strongly endorses last month’s ‘Call to Action’ by the National Crime Agency for consumers to download and update security software. Free software is often available for customers to download from their banks’ website.

Distraction thefts: driver of fraud

Distraction thefts in shops and at ATMs have been identified as a driver of fraud on lost or stolen cards, which has increased by 3% to £29.2 million from £28.2 million in the first half of 2013.

Meanwhile, mail non-receipt fraud has increased by 10% to £5 million, up from £4.6 million, with fraudsters targeting multiple occupancy residences to intercept cards and personal details from post boxes.

Counterfeit card fraud rose by 4% in the first six months of 2014 to £24.2 million, up from £23.3 million in 2013. The key driver for this modest rise is that stolen card details in the UK are being used to create counterfeit cards for use overseas in countries which have not yet implemented Chip and PIN.

Fraud on contactless cards continues to be negligible at £51,000 over the first six months of the year, which is just 0.007% of contactless card spending. Cheque fraud losses fell by 34% to £10.5 million in the first half of 2014, from £15.8 million in January to June 2013. The continued success of improved fraudulent cheque detection methods and enhanced prevention controls is the driver for this long-term decline.

The industry is tackling fraud through enforcement, information sharing, technological advances and awareness campaigns. The industry fully sponsors a specialist police unit, the Dedicated Cheque and Plastic Crime Unit (DCPCU), which identifies and targets the organised criminal gangs responsible for payment fraud. Since its inception in 2002, the DCPCU has achieved an estimated £800,000 per week in savings from reduced fraud.

Through FFA UK, the card and retail banking industry securely shares intelligence on emerging threats and identifies patterns in fraud which protect consumers and strengthen the industry’s defences.

Banks use a range of increasingly sophisticated fraud screening detection tools to prevent fraudulent transactions. FFA UK will shortly be launching a ‘vishing’ awareness initiative aimed at increasing customer vigilance over such scams.

Detective Chief Inspector Perry Stokes, head of the DCPCU, said: “Be very suspicious of phone calls, texts or e-mails which come out of the blue asking for personal or financial details, regardless of who the person on the other end of the line claims to represent. Be aware of the warning signs. Your bank will never ask you for your four-digit PIN, to transfer or withdraw money or to give your card to a courier. We’re asking members of the public to pass this information on to any family and friends who may be unaware, and echo recent calls made by the Commissioner of the City of London Police for a national awareness-raising campaign led by Government.”

View the full 2014 half year fraud figures

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Facebook app launched by young developers to help peers apply for apprenticeships

A team consisting of budding developers from Nottingham has created an app to help school and college leavers find an apprenticeship.

The ‘App-renticeships’ app is the winning design selected by judges following a national competition to develop a tool that helps young job seekers improve the quality of their applications to secure an apprenticeship.

Developed by a young team from Nottingham, the app is being launched today (Monday 19 August) on the National Apprenticeship Service’s dedicated Facebook page as part of a drive to encourage more young people to make apprenticeships their first choice after receiving their exam results. It can also be downloaded as a free mobile phone app.

Screen grab of the new app on Facebook

Screen grab of the new app on Facebook

Members of the winning team from Confetti Media Group in Nottingham are all aged between 16 and 24. They’re currently apprentices at Confetti, working in a range of roles including apprentice production runner and IT and technical apprentice.

Back row (L to R): Craig Abrahart (notgoingtouni.co.uk), Jason Holt (CEO, Holts Group of Companies), Carolyn Savage (National Apprenticeship Service). Front row (L to R): Matt Truslove, James Warkwick, Emma Jesson and Daniel Munro from Confetti Media Group, Nottingham

Back row (Left to Right): Craig Abrahart (notgoingtouni.co.uk), Jason Holt (CEO, Holts Group of Companies) and Carolyn Savage (National Apprenticeship Service). Front row (Left to Right): Matt Truslove, James Warkwick, Emma Jesson and Daniel Munro from Confetti Media Group, Nottingham

They fought off teams from around the country to develop their app, which offers a range of CV advice, Case Study videos and a search tool to help find an apprenticeship.

The team members will be attending the National Careers Service Roadshow in Nottingham today in order to promote the app launch.

The total funds the team received to produce the app was £13,000 (£3,000 for the beta version and a further £10,000 for the final app).

Other resources launched by the National Apprenticeship Service

There have been other resources launched by the National Apprenticeship Service over the examination results period:
• On apprentice.tv, a host of information films and guidance on ‘How to apply for an apprenticeship,’ a guide to Higher Apprenticeships and the new ‘How to make a flying start to your apprenticeship’
• An online ‘Apprentice Support Pack’ featuring hints and advice on starting an apprenticeship

Alison Whitlock, head of apprenticeships at the Confetti Media Group, said: “I’m absolutely delighted for the team and very proud of their achievement. It’s a brilliant user-friendly tool designed by young people with their peers in mind. We’re very excited about its launch today, and we’re also looking forward to the response it receives.”

Pictured at this morning's launch (left to right): James Warkwick, Daniel Munro, Matt Truslove, and Emma Jesson

Pictured at this morning’s launch (left to right): James Warkwick, Daniel Munro, Matt Truslove and Emma Jesson

Jaine Bolton, director at the National Apprenticeship Service, added: “The judges were all impressed by the standard of the applications received in the Facebook competition. It’s clear how much thought and hard work had gone into creating the final app, which really is a winning design created by young people who have been in the same position as those they have created it for. It looks great, is easy to use and will hopefully help young job seekers get the results they are looking for in securing them an apprenticeship.”

David Way, executive director of the National Apprenticeship Service, commented: “Apprenticeships are fast becoming the first choice for many young people as they offer a way to earn while you learn. It’s great to see that parents are also backing apprenticeships for their own children. We need as many employers as possible to offer apprenticeships and see how hiring an apprentice can help them grow their own talent.”

This news comes as the 100 in 100 campaign for 2013 (designed to create new apprenticeships in the security sector) continues to gather momentum.

To help young people access impartial and independent advice, the National Careers Service and National Apprenticeship Service are running a special #ResultsAdvice service on Twitter and Facebook until 29 August in order to give young people the opportunity to ask questions about their exam results, apprenticeships and wider career options.

The National Careers Service can also be contacted free on 0800 100 900 from 8.00 am-10.00 pm or go online for information and advice or to talk to an adviser via webchat. The young people’s section has lots of useful information to help them reach decisions about their future.

1 Between 3-11 May 2013, the ICM interviewed 1,000 parents of 14-24 year olds from England. The percentages refer to parents who would ‘definitely’ (36%) or ‘maybe’ (46%) “recommend an apprenticeship as a career route for your child(ren).”

2 Percentages refer to all those saying they would ‘definitely’ or ‘probably’ like to do an Apprenticeship if one were available.

3 http://notgoingtouniblog.wordpress.com/2013/08/13/employers-and-students-say-university-is-no-longer-the-best-post-school-option/

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