Sustained decline in UK card fraud suggests that consumer education and new technologies are working The UK Card Association has released its latest fraud figures, which show a significant drop in overall fraud for the second year running. This decline has been driven by a combination of new technologies such as chip and PIN and increased consumer awareness. However, new threats are likely to emerge over the coming years, particularly if vigilance declines. The UK Card Association's figures show a 17% reduction in the value of UK fraud, which fell to GBP365.4m in 2010; this follows the unprecedented decline that was seen in 2009, with fraud dropping to GBP440m after reaching a peak of GBP609.9m in 2008. Losses through fraud are now at their lowest point in almost 10 years. This sustained decline has been strongly aided by the prevalence of new technologies such as EMV chip and PIN security, enhanced Internet banking security protocols, two key factor authorizations, and online features such as SecureCode. However, technology is only ever as good as its users, and a major factor impacting on the decline in fraud is the greater awareness and vigilance shown by consumers as to the methods used by fraudsters. According to Datamonitor's Financial Services Consumer Insight Survey 2010, consumers expressed significant or very significant concern about the possibility of their card details being stolen on the Internet (which worried 62.6% of consumers surveyed), at an ATM (59.1%), or in a shop or restaurant (57.1%). And the range of concerns extended further; for example, 56.7% of consumers worry about their online or telephone banking details being stolen, 51.2% are concerned about their identity being stolen and used to apply for a loan or mortgage, and 44.7% fear being tricked into giving their details to a fraudster. As such, these high levels of concern correlate strongly with areas where consumer behaviour has an impact on the risks of fraud, such as the shielding of PINs at ATMs and various forms of card not present fraud. Unsurprisingly, areas with lower levels of media and public attention, such as cheque fraud, have witnessed a much more marginal decline of only 3%. In addition, fraud that occurs without any consumer input, such as mail being intercepted, has seen the strongest rise of 22%. Interestingly, fraud in other countries using UK cards has seen a sharp fall, dropping by 23% between 2009 and 2010. Overseas card skimming was long seen as a growth area for card fraud, but the introduction of EMV in tourist and other markets has helped bring this figure down. The shift in criminal activity to areas such as mail non-receipt highlights the ever-changing and dynamic nature of card fraud. Criminal activity in this sector will continue to evolve, hitting the easiest targets whenever possible. The real risk is that as fraud declines, consumers and issuers will both become less vigilant. While direct consumer mistakes can lead to an increase in fraud, a relaxation of consumer concern is likely to cause banks to focus less on fraud prevention. Preventing card fraud remains an expensive business, and the costs associated with some security measures are borne simply to ease the fears of consumers, and reduce the risk of them shifting to other providers. If consumer concerns diminish, however, issuers may feel less inclined to invest in expensive security measures, and instead write off fraud as simply a cost of doing business. Although the signs are positive, there is no guarantee these figures will not rise again in future.