Online banking fraud on the up

Online banking fraud has seen a massive increase in the UK over the past year according to figures released this Wednesday by industry association APACS. A 44 percent has been reported by APACS, with total cyberfraud losses going up to £33.5m last year. The biggest cause for this growth has been the massive jump in the number of registered phishing attacks, up from 1,713 in 2005 to 14,156 in 2006. Financial losses from card ID theft also went up by 5 percent to £31.9m.

This growth in phishing incidents could be explained by an increase in sophistication of such attacks, seen over the past few years. Phishing emails used to be written in poor English, while fake banking sites were also of poor quality and evident to the naked eye. Now, though, cyberfraudsters create perfect copies of financial sites and send out convincing phishing spam to catch out their victims.

Despite the magnitude of these figures, APACS also reported some good news regarding cyberfraud and phishing: whilst it accounted for losses of £22.5m in the first half of last year, these fell by more than 50 percent to £11m in the second half. And overall levels of financial fraud also fell by 3 percent from £439.4m to £428.0m. The biggest improvements were noted in fraud using stolen or lost cards, which include retailer and cash machine transactions. UK domestic fraud has fallen by some 13 percent, driven by the introduction of Chip and PIN in 2006. This example, APACS believes, should now be used to improve the safety of card-not-present transactions such as online banking and shopping, and new technologies and prevention solutions are required to drive cyberfraud down.