Losses mount as online bank fraud jumps 55 per cent

 

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By Rene Millman

Posted on 7 Nov 2006 at 15:59

Online banking fraud cost the industry £22.5m in the first half of the year, according to APACS - a rise of 55 per cent. And phishing incidents increase nearly 1,500 per cent.

New figures from the UK payments association APACS showed that losses from online banking fraud rose to £22.5 million for the first six months of 2006 from £14.5 million. The same report also found that in the first six months of the year there were 5,059 reported phishing incidents compared to 312 reported in the first six months of 2005, an increase of 1,471 per cent.

Overall the level of online and card fraud in the UK fell five per cent in this period from £219.5 million to £209.3 million. The APACS report attributed this fall to the introduction of chip and pin. Card ID theft fell seven per cent to £15 million.

Sandra Quinn, director of corporate communications at APACS said these figures showed that efforts by the industry to combat fraud were 'making their mark'.

'However, each and everyone of us can also help defeat the fraudsters, and protect our cards and online accounts, by keeping our PINs, passwords and personal information safe and secure,' she said in a statement.

Experts said businesses needed to make sure that they take sufficient precautions to combat fraud.

'It's very positive to hear that online card fraud has dropped, but it's just as worrying to see that both online banking and phishing losses have risen,' said Ed Gibson, chief security advisor at Microsoft.

'But even with all sensible precautions in place, people using and managing computers still have to operate the same level of common sense in the online world as they do in the physical world,' he added.

Others said that phishing attacks would continue to rise as fraudsters use more sophisticated measures. Donal Casey, security consultant at Morse said that anti-spam and anti-virus technology won't be enough to protect consumers.

'However, some banks are starting to put in place two factor authentication technology which will provide them and their customers with an extra level of security and thus go some way to preventing the fraudsters from carrying out criminal activities,' said Casey.

'Customers are provided with a unique log in number through either a token or their mobile phone which they use to log into their bank account. As a new log in number is generated every minute, life is made a lot more difficult for the fraudsters,' he added.

Lloyds TSB trialled such a system in the largest pilot of its kind in October 2005.

Some 30,000 participants were given a key-fob device that creates a unique one time code to help secure access and prevent fraud.

APACS has published its Ten Top Tips to help consumers fight card crime and stay safe when shopping or banking online. They can be found at www.cardwatch.org.uk