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UK online banking fraud jumps by 71% in 2014 despite improved security

Mon 15 Sep 2014

Online banking losses through fraud have rocketed 71% in the first half of 2014, reaching a total of £29mn, according to recent figures released by Financial Fraud Action UK [PDF].

The group however urged that the statistics are considered within the context of a booming e-commerce market, which has risen to approximately £47bn in the same period.

The figures underline an emerging criminal trend of fraudsters targeting individuals and businesses directly. As more security key and other log-in gadgets are being introduced for online banking consumers, increasingly scammers are falsely posing as banks and building societies to retrieve financial information over the phone, in an activity known as ‘vishing.’ Such methods allow the criminals to skip banks’ anti-fraud software and technologies.

“The technology banks have been introducing over the last three years has helped fight against online fraud, but unfortunately criminals are beating the security systems simply through pressuring people to give away their passwords,” explained a Financial Fraud Action UK spokesperson.

In addition to cold calls, cyber criminals are increasingly using computer viruses hosted in emails which can access personal financial details.

Perry Stokes of the City of London police warned online banking customers to “be very suspicious of phone calls, texts or emails which come out of the blue asking for personal or financial details, regardless of who they claim to represent.”

“Be aware of the warning signs: your bank will never ask you for your four digit PIN, to transfer or withdraw money, or to give your card to a courier,” he added.

In an effort to tackle the rise in online fraud, Barclays revealed its Biometric Reader earlier this month. The technology is able to scan a customer’s veins in their finger to gain access to their online accounts, rather than requiring PINs or passwords.

“This solution is in direct response to client concerns about the threat of online fraud, while making our customers’ lives easier through its convenience,” said Ashok Vaswani, chief executive of Barclays personal and corporate banking.

Tags:

banks cybercrime news security
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