§ Harry CohenTo ask the Secretary of State for the Home Department if he will make a statement on the impact of credit card fraud on British businesses' operating costs. [130813]
§ Ms BlearsThe Government do not collect figures on the cost of credit card fraud but the Association for Payment Clearing Services (APACS) estimates the cost of all plastic card fraud in the year to August 2002 to be £424.6 million. A majority of these costs will be borne by businesses. As with all expenses the costs of card fraud will have an impact on business's operating costs.
APACS figures up to July 2003, which have not yet been published, suggest a year on year decline in card fraud of around 5 per cent. This follows a number of initiatives both within government and in partnership with the private sector to combat this type of fraud.
In April 2002, the Government launched a two-year pilot of a unique policing unit (the Dedicated Cheque and Plastic Crime Unit—DCPCU) based in London, which works closely with the banking industry to reduce organised card and cheque fraud, using intelligence largely provided by the card industry. DCPCU has had significant success in its first year including recovery of more than 4,000 cards and 524 cheques, resulting in 59 arrests and six convictions with potential savings of £13.35 million.
The Government are actively supporting the introduction of 'Chip and PIN', a major finance and retail industry initiative to reduce card fraud. This involves the introduction of microchips into payment 1201W cards to help authentication, combined with the use of PIN codes in place of signatures. The banking industry anticipates that by 2005 the new Chip and PIN technology will eliminate over half of the predicted level of plastic card fraud in the UK.
§ Mr. Stephen O'BrienTo ask the Secretary of State for the Home Department what recent assessment he has made of the cost of fraud in the UK's financial services industry on the UK economy. [131384]
§ Caroline FlintA Home Office study, the Economic and Social Costs of Crime, published in July 2000 estimated that the total economic cost of fraud in Britain was up to £13.8 billion in 2000, equivalent to £230 per head. The Home Office does not collate separate figures on the costs of fraud in the United Kingdom's financial services industry.
§ Mr. Stephen O'BrienTo ask the Secretary of State for the Home Department what discussions he has had with(a) credit card companies, (b) representatives of the retail sector and (c) law enforcement agencies on the level of credit card fraud in the United Kingdom. [131387]
§ Ms BlearsThe Home Office is actively supporting the finance and retail industry's 'Chip and PIN' initiative and maintains regular contact with the Association for Payment Clearing Services and the British Retail Consortium (BRC). 'Chip and PIN' involves the introduction of microchips into payment cards to help authentication combined with the introduction of PIN codes in place of signatures. The banking industry anticipates that by 2005, the new Chip and PIN technology will eliminate over half of the predicted level of plastic card fraud in the UK.
Since my appointment to the Home Office in June I have provided forewords for the two reports on the public trial of 'Chip and PIN' which took place in Northampton between May and August this year. I shall shortly be meeting with APACS and the BRC to receive a progress report on the 'Chip and PIN' project. My right hon. Friend the Member for Southampton, Itchen (Mr. Denham) also discussed the 'Chip and PIN' initiative with the BRC and APACS.
The Home Office has frequent and regular contact with law enforcement agencies. In addition, in April 2002 the Government launched a two-year pilot of a unique policing unit (the Dedicated Cheque and Plastic Crime Unit—DCPCU), which is funded jointly by the Home Office and the card industry. The DCPCU is based in London and works closely with the banking industry to reduce organised card and cheque fraud, using intelligence largely provided by the card industry. DCPCU has had significant success in its first year including recovery of more than 4,000 cards and 524 cheques, resulting in 59 arrests and six convictions with potential savings of £13.35million.