Online banking fraud in the United Kingdom jumped by 55 percent during the first six months of this year as criminals become even more sophisticated in their use of technology.
Losses from online banking fraud hit 39 million pounds (US$62 million) in the first half of the year, despite a decrease in the overall amount of credit card fraud in the United Kingdom.
Banking industry body Financial Fraud Action UK warned that online fraud is becoming increasingly sophisticated, with fraudsters targeting customers using malware and phishing scams. The number of phishing incidents rose by 26 percent to 26,000 during the same six-month period from January to June, according to the group.
But it also said online security measures, which require the cardholder to enter a password when making purchases over the Web, have contributed to an 18 percent reduction in the amount of phone, Internet and mail order fraud.
But Financial Fraud Action UK's head of fraud control Katy Worobec said in a statement: "Whilst industry online security initiatives such as Verified by Visa and MasterCard SecureCode may be making their presence felt, the fraudsters are never going to shut up shop and, of course, there are emerging areas such as online banking fraud which has risen again."
William Beer, a director at PricewaterhouseCoopers One Security practice, said criminals are now very specialized in identifying and exploiting vulnerabilities, unprotected consumer PCs and the public's lack of awareness, which make them much easier to attack than banks' networks. "That said, many companies will need to assess and ensure that their security systems are up to date to counter a new range of complex and aggressive threats including online fraud, cyberattacks and e-espionage," he said in a statement.
The online fraud statistics go against the overall trend, which has seen a decrease in credit card fraud of 23 percent from the same period last year. Card fraud losses totaled 232.8 million pounds (US$370.3 million) in the first half of 2009, translating to around a tenth of a penny being lost to fraud for every pound (US$1.59) spent on cards.
The introduction of chip and PIN in U.K. stores has played an important role in this reduction, with over-the-counter losses down by 26 percent year-on-year.
Fraud on lost and stolen cards is also down by 6 percent to 25.1 million pounds (US$39.9 million)--its lowest level since 1991. The group suggests that the dip may be due to criminals targeting foreign-issued cards, which do not yet use the chip and PIN system.
Financial Fraud Action UK reported there has also been a 45 percent decrease in fraud abroad. This is largely due to improved fraud detection systems in banks, which monitor irregular spending.
Sophie Curtis of Silicon.com reported from London.
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