Same thing happened to me in January. HBOS responded very well and sorted me out with a new card, and wiped out the £1000+ that had been run up on the card. Had to complete the usual declaration forms, but otherwise no hassle.
Interestingly, my son works for a rival bank, and he says that rumours are rife that most of these cases arise from inside jobs - employees selling on card details to low-lifes.