The level of cardholder-not-present fraud is far greater than had previously been thought, according to an investigation by the BBC.

The organisation quotes banking industry data which suggests card fraud from the internet, phone or mail order accounted for £290.5m in 2007.

But its own investigation found the figure was more like £500m when failed attempts at fraud were also considered.

Two BBC journalists who posed as computer hackers were able to gain access to a website which contained details of thousands of stolen card details obtained from small online retailers.

The fraudulent transactions were traced to a UK address and the findings of the investigation have now been passed onto the police.