Internet banking fraud hits UK consumers hard

Online banking fraud is becoming a more severe problem for UK consumers according to research released this week.

In 2009 losses in online banking fraud totalled £60 million, a 14% rise on the previous year.

The report by the UK Cards Association said there were 51,000 incidents where members of the public had entered their confidential banking information into a fake website. Five years ago there were just 1,700 incidents reported _ an indication of how this is a growing problem.

The research fits in with the recent report from the National Fraud Agency which reported that losses through online scams had shot up in 2009.

Online banking losses

Overall consumers lost a total of £59.7 million through phishing scams in 2009, a 14 per cent rise on the 2008 figure of £52.5 million. The rise in online banking losses is partly attributable to the increasing popularity of online banking among consumers, but the UK Cards Association says that criminals are changing their tactics. Instead of targeting banks' own systems as they did previously, they are increasingly focusing on PCs by duping consumers through fake websites running sophisticated malaware software.

UK credit card fraud

More positively the report did assert that fraud targeting credit cards fell sharply during 2009. There was a 28 per cent reduction in credit card fraud _ the first time it has decreased since 2006 _ to £440 million. The UK Cards Association believes a combination of chip and PIN services being rolled out, more sophisticated fraud prevention and screening systems deployed by banks and retailers and the work of the Dedicated Cheque and Plastic Crime Unit (DCPC) which since its launch in 2002 has been responsible for keeping over £340 million of consumers' money away from criminals.

Despite this decline David Cooper, Chairman of the Fraud Control Steering Group, the payment industry's leading fraud prevention group, said: "Card fraud remains a main focus of criminal activity. However, the industry remains committed to containing and reducing all areas of fraud. To this end, we will continue our partnership approach _ working with law enforcement, retailers, consumers and the Home Office _ to tackle fraud head-on."

Source - Security International's UK Correspondent

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