Contactless fraud – are the figures as bad as they look?
Recent news released by Action Fraud revealed that, from April 2017 to January 2018, the number of contactless card fraud cases reported in the UK had nearly doubled compared to the same period the previous year. The number of cases increased from 1,440 to 2,739, with losses growing from £711,000 to £1.8 million. This news, which comes on the back of Worldpay announcing that contactless card payments in the UK had overtaken chip-and-PIN transactions for the first time (accounting for 52% of all in-store transactions), is obviously worrying for consumers.
With the average amount lost per case hitting £657 - compared to £493 the previous year - it is clear that the fraudsters are using the £30 contactless limit to make multiple small transactions quickly in a bid to go by undetected for as long as possible.
However, in a country with 119 million contactless cards in circulation and a £31.9 billion total spend over the reported period, contactless fraud actually only accounts for 3% of total card fraud – a much lower figure than the headlines would lead you to believe. In addition, there was not a single case of contactless fraud recorded on cards that were still in the possession of the owner, meaning posts circulating social media of people skimming cards on public transport are simply scare-mongering tactics.
Nevertheless, with a survey conducted by Compass Plus last year revealing that almost half of consumers (48%) consider contactless payments as the least secure way to pay, it is more important than ever for FIs to not only educate their customers in keeping their money safe, but invest in a fraud prevention and detection system.