A cyber-fraudster in France this week cheated a Burford businessman out of nearly £10,000 - despite his having signed up to a fraud protection scheme recommended to him by his bank. Thames Valley Police say they cannot help him, since the fraudster was in France when the theft was committed.

Businessman Brian Stoneman, 33, who runs a successful company in Burford, Tora Networks, selling computer hardware over the net, discovered all this after his bank, Lloyds TSB, rang saying that £9,800 was about to be taken out of his account - or "charged back" in bank jargon - whether he gave his permission or not. The money was a credit card payment for three pieces of hardware which he had sold in separate transactions, and the buyer in France had been using the card fraudulently. Mr Stoneman, who says his business, Tora Networks, has a £600,000 annual turnover, said: "I plan to get married in June, so it's not easy to take a £10k hit on the chin."

He added, looking ruefully at a computer screen displaying a map of the world: "About 15 per cent of my trade comes from abroad and I was planning to expand that side of the business. But after this I am having a total rethink and aiming to provide a local Oxfordshire service called Tora LIPS (Local IT Procurement and Support)".

A spokesman for Lloyds TSB said: "We sympathise with Mr Stoneman and deeply regret this has happened, but we do advise merchants to check all details before parting with goods. Also check out website www.shopsafeonline.org.uk, whether you are a merchant or a shopper."

But what more could Mr Stoneman have done? At the suggestion of his bank, he had engaged Protx, owned by the UK's largest supplier of accountancy software, Sage, to facilitate payments and carry out checks on identities of cardholders, addresses, etc..

He said: "These transactions, totalling £9,800, were made on three different occasions. On two of those occasions, the transaction received a green light - or Low Risk - from The 3rd Man, a card fraud protection company subcontracted by Protx to check cards, and on one it received an amber light, meaning Medium Risk."

"What I want to know is why those two were given the green light when the identity and address of the cardholder, whom I have since discovered was operating from a holiday cottage, had apparently not been checked out by anyone."

He added: "I advise anyone trading abroad online to check that their authoriser really does the checks you might think they do. When this happens to you, you'll discover you're on your own."

Ed Pearce, head of operations at Protx, used by millions of merchants worldwide, confirmed that addresses were not checked on all foreign cards, as they are on transactions within UK.

He said : "No one had checked out addresses in this case, but if you look at the bottom of the screen confirming the Authorised Payment Transaction you'll see it clearly says that."

But there is a light at the end of this murky and expensive tunnel. Debit card company Maestro will, from July 1 this year, make mandatory a system called 3D Secure, which requires cardholders to enter a secret password for each transaction.

Many might hope that others will follow, for the great news here is that any merchant accepting payment from a buyer using the 3D Secure system, but still suffering fraud, will not be liable for losses. Instead, the card issuer will be liable.

The message from Mr Pearce is also clear: "The 3D Secure system already exists on a voluntary basis. Use it."

A spokesman from Thames Valley Police said: "Home Office guidelines state that we should record but not investigate crimes like this, committed abroad. Only major or serious crimes are reported to Interpol. We would advise Mr Stoneman to contact the French Police."

But Mr Stoneman said: "I see it as a crime in the UK as our web store is in the UK, offices are in the UK, I am in the UK and goods were stolen from the UK. I am the victim and therefore there is a crime in the UK.

"I want to tell your readers to be very careful. They think they are safe, when that is far from the truth, and nobody in the UK will help them."

Overall, card fraud topped £532m last year, a 25 per cent rise on 2006, according to figures from the Association for Payment Clearance Services. The cost of "card not present" fraud alone hit £290.5m, up 37 per cent on the year before.

If that figure is not staggering enough, the true figure is probably nearer to £500m when cards not issued in the UK - but used to obtain goods here - is taken into account, according to The 3rd Man.

The truth is, of course, that the Internet offers opportunities galore for young entrepreneurs such as him - but also hidden dangers.

He asked rhetorically: "What is there to stop anyone stealing a card and using it abroad to buy goods here? Answer: Nothing, as far as I can see."

He added that there is little wonder that card fraud is rising so fast. This week he, for one, signed up for the 3D Secure system.