By disrupting the finances behind the crimes, we will be helping to stop their criminal enterprises

Home Office spokesman

The multi-million pound scheme known as the "Dedicated Cheque and Plastic Crime Unit," managed jointly by the police and the banking industry, will run initially as a two year pilot.

As revealed by BBC News Online in July last year, the partnership will tackle the growing problem of organised credit and personal banking fraud, which cost the banking industry more than �411m last year.

This type of fraud is increasingly being used by organised criminals to finance other criminal activities, such as drug trafficking.

 Click here for different fraud types

Member banks of the Association for Payment Clearing Services (APACS) will fund 75% of the �5.6m cost of the pilot, with the Home Office providing �1.4m.

Unique approach

The banking industry has become increasingly concerned about credit card and banking fraud, particularly counterfeiting, commonly known as 'skimming.'

Skimming is a process where the genuine data in the magnetic stripe on one card is electronically copied onto another without the legitimate cardholder's knowledge.

It was the worst type of card fraud last year, growing by 50% and costing the industry �160m.

Fraud losses by fraud-type (2001)

Counterfeit cards: �160.3m Cards stolen or lost: �114m Card-not-present fraud (mail, telephone, internet): �95.7m Cards intercepted in the post: �26.7m Fraudulent applications: �6.6m Other: �8m Total: �411.4m

Cheque, ATM, identity theft and internet, telephone and mail-order card fraud or "card-not-present-fraud" will also be investigated.

Home Office Crime Reduction Minister John Denham, said: "Cheque and plastic card fraud is a rapidly growing problem.

"The new specialist unit will enable this kind of fraud to be tackled more effectively as the nature of the crime often means that police forces have neither the resources nor the expertise to investigate these specialist crimes."

The unit will be based in the City of London and will employ 23 police officers seconded from the Metropolitan and City of London Police forces.

These police officers will be joined by six fraud experts from the banking industry.

The unit will be assisted by other law enforcement agencies across England and Wales, and use intelligence largely provided by the banking industry.

Roots of crime

The initiative is also aimed at choking off criminals' access to funds.

"By disrupting the finances behind the crimes, we will be helping to stop their criminal enterprises," said a Home Office spokesman.

If the pilot proves successful, the organisers hope that it will become permanent and take on an international dimension by working alongside agencies such as Europol and Interpol.

The Home Office said that it welcomed the "unique" scheme, and its desire to disrupt the financing behind organised crime.

But a spokesman stressed that it was also up to companies to look at their own systems to prevent fraud happening in the first place.

A spokesman told BBC News Online: "The criminals would not be able to commit this fraud if there were effective fraud prevention measures in place."

Fraud types

• Counterfeit: Most cases involve skimming, a process where the genuine data in the magnetic strip on one card is electronically copied onto another without the legitimate cardholder's knowledge.

• Card-not-present fraud: Involves using fraudulently-obtained card details to make a purchase through the phone, mail order or internet. Usually the details are taken from a discarded receipt or copied from a card without the owner's knowledge.

• Identity theft: Evidence of identity theft from card accounts is currently minimal, but the banking industry is preparing for a possible rise as the chip and PIN system makes its impact from 2005. It believes that these new systems could drive criminals to different fraud methods

• Fraud conducted at cash machines: Usually happens with lost and stolen cards. Many cases of ATM fraud occur when the legitimate cardholder has written down their PIN and kept it with their card in a purse or wallet that is stolen.

  Shoulder surfing happens where criminals look over a cash machine user's shoulder to watch them enter their PIN and then steal the card using distraction technique or pick pocketing.

  Source: APACS/Home Office

 Click here to return