Reporting Credit Card Fraud

The Government has been accused of not taking credit card fraud seriously after a change in reporting rules in April. In addition, banks stand accused of hiding the extent of credit card fraud too.

In April Victims of debit and credit card fraud were told not to bother reporting the crime to police, but to contact their bank instead. With more than 13,000 cases of card fraud each week, it is a regular crime, but since the change in rules some police forces have not had any cases referred to them. The system was changed by the Home Office to reduce bureaucracy.

When one fraud case was reported to the police they refused to act, and he was told to contact his bank. There has been a “skimming” scam at petrol stations which has affected many hundreds of motorists around the country, and it has been suggested that this would have been less serious if the banks had notified the police sooner.

The 2006 Fraud Act contained the rule changes which cover any deception involving cheques, plastic cards and online transactions. Since the new rules came into force on 1 April 2007 Banks have been responsible for passing fraud figures to the police, along with evidence of major criminal gangs. Critics of the way it works now say that banks may manipulate the figures to hide the true figures.

When the rule changes were implemented security experts called the move 'astounding' and suggested amounted to the privatisation of the justice system; it appeared to be an attempt by Government, police and banks to push the crime - which costs the nation £428m a year - under the carpet.

At the same time teams of police experts in investigating card fraud were disbanded. In 2006 there were 700,000 individual cases of card fraud, with the average loss totalling £608. When the announcement was made, The Association of Payment Clearing Services (Apacs), the trade body for the plastic card operations of the big banks and credit card companies, commented: 'It will be up to the financial institution involved, and not the account holder, to pass details of the relevant crime on to police.'

To try and keep accurate figures Apacs will provide the Home Office with fraud figures for cheque, plastic and online banking fraud losses. These will then be published as part of the Government's annual crime figures, to give a more realistic picture of the scale of this type of crime. Apacs said that the new system was an legitimate attempt to cut bureaucracy.

Suggestions that the true extent of card fraud crime was being hidden were rejected by Apacs, however, and they said that police forces were being told, Only eight weeks into the process, it claimed there were teething problems. One bank was said to be reporting 100 cases a month.

Critics have said that fraud is a criminal offence and should be dealt with by those trained to deal with criminals. It is doubtful whether any banking staff will receive extra training to do the same thing. The extent of the crimes might be hidden and criminals will take the view there is much less of a risk of being caught.

Tom Smith
6th July 2007