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Credit card fraud on the Internet or over the telephone has soared by more than one third during the past two years, according to the latest figures released by payment services group APACS.

This type of fraud is now running at £109.6 million in Britain – representing no less than £300,000 per day – and accounts for more than a quarter of all illegal use of plastic cards. Known as 'card not present' fraud because the buyer isn't around to sign for the purchase, this is now the second most common form of card crime in the country.

Back in 2001, this thorny problem for retailers manifested itself in losses of £82.2 million per annum, the latest rises coinciding with a boom in Internet shopping and online banking. The good news for security professionals is that APACS has also reported a slight drop in total card fraud, which was down at £411.6 million in the year to June 2003 from £431.3 million.

Apparently, close on 17 million people in the UK have used the Internet to buy goods during the past 12 months. Only three years ago, just two in every ten computer owners shopped online, but today that figure has risen to six.

In spite of the rising fraud, APACS is quick to point out that many end users fail to take even the most basic of security precautions. One in every three doesn't shred or burn bank or credit card statements, while one-in-five allows somebody else to use their card for buying items over the Internet or by telephone. According to APACS many individuals (and, indeed, businesses) fail to check bank statements with anything like enough rigour.

Sadly, cloned identity crime – whereby a trickster uses someone else's name and address to apply for a card – is on the increase, up by a staggering £25 million from £15.4 million in the past 12 months.

Compulsory ID cards are "absolutely essential" in the war against terrorism and fraud, insists Metropolitan Police Commissioner Sir John Stevens.

Although Home Secretary David Blunkett's far-reaching plans for national ID cards have met with stern opposition from some factions of the Cabinet, Sir John is adamant that identity cards carrying biometric features such as fingerprints ought to be introduced at the earliest possible opportunity. "Given the dangerous environment we're now all living in, it's vital that we have a proper means of ID," he said.

Speaking at the recent Consec 2003 – the annual gathering of the Association of Security Consultants – Conservative MP Ann Widdecombe suggested that if a national ID card were to be introduced it must be "more or less fool-poof".

Widdecombe added: "This is an enormously emotive issue in terms of civil liberties. One suspects that unless there's a terrorist outrage in this country on a major scale that galvanises the public mindset, by which time it's too late, there'll be a struggle ahead to introduce such a scheme."

Widdecombe feels that the introduction of any ID card ought to be voluntary at the outset, but made so attractive by Government that people will warm to them.