Online bank fraud soars in UK

 

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By Barry Collins

Posted on 2 Oct 2008 at 08:25

The losses incurred from online banking fraud soared by 185% in the first six months of this year, according to the latest industry figures.

The UK payments association APACS says online banking fraud losses totalled £21.4 million in January to June of this year, compared to just £7.5m from the same period in 2007.

APACS points the finger at the marked increase in successful phishing attacks, which have rocketed from 7,224 last year to more than 20,000 in the first half of 2008.

"The increase is largely due to criminals targeting online banking customers through phishing and spyware scams - because the banks' own systems have proved difficult to attack," APACS claims.

The sharp increase in fraud will renew calls for banks to made legally liable for electronic fraud - a recommendation made by
the House of Lords Science and Technology Committee earlier this year.

Net fraud rise

The APACS figures also show a significant increase in online fraud across the board. Phone, internet and mail order fraud (or Card-not-present fraud as the industry calls it) rose by 18% to £161.9m.

Yet, the payments association claims the figures aren't that alarming when you consider the growth of the online shopping market. "These losses need to be seen in the context of increasing numbers of online retailers and ever-growing numbers of online transactions - from 2001 to 2007 this type of fraud went up by 204% whilst, over the same time period, the value of online shopping card transactions alone increased by 415%," it claims.

APACS says it will soon step up measures to fight online fraud. "APACS is launching a new campaign later this month - Be Card Smart Online - which is aimed at providing further guidance and advice to help consumers stay safe online," says Sarah Quinn, director of communications at APACS.

Find out how secure your online banks is here.