FRAUDSTERS frustrated by the introduction of chip-and-pin technology are increasingly stealing card details for use over the internet and telephone, the Association of Payment Clearing Services (Apacs) said last week.

Internet and telephone credit-card fraud has leapt by almost a third in the past year, according to new figures. But overall card fraud has fallen from £253m in the first half of 2004 to £219m in the same period this year.

Card issuers and retailers believe the drop is due to people using a personal identification number (pin) to verify transactions, rather than signing a receipt.

Mark Bowerman of Apacs said: “The introduction of chip and pin has made it more difficult for fraudsters to use counterfeit cards to make face-to-face purchases.”

However, all a fraudster needs to commit so-called “card-not-present” fraud over the telephone or internet is the credit-card number, the expiry date, the cardholder’s name and the three-digit verification number on the card’s signature strip.

Linda Anderson, a 47-year-old business coach, noticed a £76 internet purchase she didn’t recognise on her last Barclaycard statement. The card company is looking into the potentially fraudulent transaction.

Anderson, who lives in Kingston, southwest London, with her sons Michael, 12, and Dominic, 10, said: “My Barclaycard has been used fraudulently before, so I always check my statements. I’m also careful not to let my card out of my possession. I do tend to shop online a lot, however, so I suppose fraudsters may have been somehow able to access my details over the internet.”

Britons are predicted to spend £27 billion on credit cards in the run-up to Christmas, with a record £5 billion of that online.

Internet shoppers can lower their chances of being taken in by fraudsters by signing up to either Verified by Visa or Mastercard SecureCode, both of which mean that transactions on your card cannot go ahead unless you key in a password to verify the purchase.

Even these systems are not foolproof, however, and card companies are constantly looking at new ways to cut internet and telephone fraud.

In the meantime, the Banking Code states that lenders must cover their customers’ losses, as long as those involved did not act in a negligent way. Actions viewed as negligent include writing down your Pin and keeping it in your purse or wallet, or being taken in by e-mails purporting to be from your card company more than once.

Measures you can take to protect yourself include asking how bank details will be used before divulging them, and carrying only necessary documents with you. Checking your bank statements and shredding them along with bills and direct mail also helps.

Apacs’ tips for safe Christmas shopping over the internet include making sure your computer has up-to-date anti-virus software installed, printing out your order and shopping only at secure websites.

You can tell a website is secure if it displays a locked padlock or unbroken key symbol. The beginning of the site address should also change from http to https if you are making a purchase using a secure connection.

Visit getsafeonline.org or cardwatch.org.uk for more advice on how to make the most of shopping online without falling victim to fraud.