Technology

Online Banking Fraud Soars in Britain


Online banking fraud jumped by 55 per cent during the first six months of this year as criminals become even more sophisticated in their use of technology.

Losses from online banking fraud hit £39m in the first half of the year, despite a decrease in the overall amount of credit card fraud in the UK.

Banking industry body Financial Fraud Action UK warned that online fraud is becoming increasingly sophisticated, with fraudsters targeting customers using malware and phishing scams. The number of phishing incidents rose by 26 per cent to 26,000 during the same six-month period from January to June, according to the group.

But it also said online security measures, which require the cardholder to enter a password when making purchases over the web, have contributed to an 18 per cent reduction in the amount of phone, internet and mail order fraud.

But Financial Fraud Action UK's head of fraud control Katy Worobec said in a statement: "Whilst industry online security initiatives such as Verified by Visa (V) and MasterCard (MA) SecureCode may be making their presence felt, the fraudsters are never going to shut up shop and, of course, there are emerging areas such as online banking fraud which has risen again."

William Beer, a director at PricewaterhouseCoopers One Security practice, said criminals are now very specialised in identifying and exploiting vulnerabilities, unprotected consumer PCs and the public's lack of awareness, which make them much easier to attack than banks' networks. "That said, many companies will need to assess and ensure that their security systems are up to date to counter a new range of complex and aggressive threats including online fraud, cyber attacks and e-espionage," he said in a statement.

The online fraud statistics go against the overall trend, which has seen a decrease in credit card fraud of 23 per cent from the same period last year. Card fraud losses totalled £232.8m in the first half of 2009, translating to around a tenth of a penny being lost to fraud for every £1 spent on cards.

The introduction of chip and PIN in UK stores has played an important role in this reduction, with over-the-counter losses down by 26 per cent year-on-year.

Fraud on lost and stolen cards is also down by six per cent to £25.1m—its lowest level since 1991. The group suggests that the dip may be due to criminals targeting foreign-issued cards, which do not yet use the chip and PIN system.

Financial Fraud Action UK reported there has also been a 45 per cent decrease in fraud abroad. This is largely due to improved fraud detection systems in banks, which monitor irregular spending.

The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus