Banks toughen up on overseas fraud

Posted in 'Identity Theft' by Richard Catlin

08 January 2009

If the cold spell has you reaching for the holiday brochures for a well earned break abroad in 2009, you’d better make a note to let your credit card company know before you set off.

It has always been advisable to let your card company know that they should expect to see transactions that fall outside of your normal purchasing habits. Some card companies welcome such calls, others will say it isn’t essential that you tell them, but all lenders are now introducing even tougher rules on overseas fraud prevention, making it much more important to share your travel plans.

This move comes as losses to overseas fraud reached £121.2m in the first six months of last year – a figure that seems certain to increase further when the full statistics for 2008 are released.

This amount accounts for 40% of total card losses to fraud, as criminals seek to overcome the success of Chip & PIN in the UK by moving cloned card operations to countries with less coverage – with the USA, Italy and Australia at the top of the fraud list on UK issued cards. In contrast, fraud losses in France and Spain have fallen dramatically in recent years as they continue to improve their Chip & PIN coverage.

Computer systems at banks are designed to track your normal spending activity and cash withdrawals, and if you spend outside of your usual pattern, it may well put an immediate block on your card. Notifying your card issuer won’t guarantee that you won’t face extra security checks, but it can certainly help avoid embarrassment and inconvenience.

So to reduce the risks of having your card stopped, always phone your card company before you leave the UK. And just in case, don’t rely on just one credit card when you go abroad. Take at least two cards, and photocopy them before you go, leaving the photocopy with a trusted person. If your cards are stolen, you can ring your trusted person to get the details you need so you can notify the card companies quickly.

You can find out whether your lifestyle places you at risk, and also how best to avoid falling victim using our Free Identity Theft Check Service on checkmyfile. We’ll show you where you might be vulnerable, and what actions you can take to reduce risk.

The best buy credit card for overseas travel is currently the Post Office Card, which charges the least for foreign transactions and should be in every traveller's wallet or purse.

The Post Office card carries a number of benefits in addition to its attractiveness for use abroad. With a typical APR of 16.9%, you also get 0% on balance transfers for 10 months, 0% on purchases for 3 months, and a balance transfer anniversary offer. It’s a current best buy and should definitely be in your holiday wallet.
For more details about the Post Office card, click here.
Don’t forget to apply early for your European Health Insurance Card (EHIC) – it’s free, takes 3 weeks if you use the form from the Post Office, but is much quicker using the online form at www.dh.gov.uk/travellers.