The number of travellers falling victim to credit-card fraud has soared in the past year, with the fraudulent use of UK-registered cards overseas leaping by 77%. Overseas losses from credit-and debit-card fraud totalled £208m in 2007, according to the credit-card industry’s trade body, Apacs, which says that criminal activity is highest in those countries that have yet to adopt chip-and-pin technology.

Gangs infiltrate shops, restaurants and ATMs, often recruiting staff to attach bugging devices - known as skimmers - to card-readers. As cards are swiped, the details encoded in their magnetic strips are recorded and used to manufacture counterfeits. These are then used in countries such as Morocco, Pakistan and the USA, where security measures are more easily circumvented.

“There’s clear evidence that chip-and-pin is driving down fraud in countries that have introduced the technology,” Apacs says. “Two years ago, France was the worst offender, but now the USA is number one, followed by Italy and Australia. As more and more countries adopt chip-and-pin, fraudsters are going to concentrate their efforts in countries that haven’t adopted the system.”

The Sunday Times has learnt, however, that chip-and-pin is perhaps not as foolproof as the banks insist.

Peter Temple from Cumbria had £1,800 fraudulently withdrawn from his account in January when fraudsters targeted his HSBC chip-and-pin card in the Victoria & Alfred Waterfront shopping centre, Cape Town.

“We’d been warned about the risk of crime in South Africa,” he says. “What was ironic was that we got skimmed in a tourist shop in a tourist enclave that was supposed to be safe.”

Because the withdrawals took place after he had returned to the UK, Temple had no trouble obtaining a refund from the bank, but he says things could have been different if the card had been cloned at the beginning of the trip.

“If this had happened on the first day of a three-week trip, the fraudsters could have taken £300 a day for 21 days, or until the money ran out. Not only could that have left me without funds in a foreign country, it could have made it much harder to prove my innocence on my return to the UK.”

Apacs advises travellers never to let credit cards out of their sight. “Never leave your card behind the bar,” it says. “In countries where chip-and-pin terminals are in use, there is no longer any legitimate reason for any merchant to take your card away.” As Peter Temple found out, however, even that cannot guarantee your security.

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