Online banking fraud explodes in the UK

Losses from fraud increase 185% for the first six months of 2008

LONDON – Losses from banking fraud have risen 185% in the UK for the first half of 2008 alone, according to new research by payments association Apacs. Phishing and spyware attacks against internet banking users are largely to blame for the soaring figures.

The UK banking industry lost £21.4 million due to online fraud in the first half of this year, up from £7.5 million last year. Over 20,000 phishing websites – designed to trick consumers into revealing personal or account information – were created over the same period.

Card fraud continued to increase, rising 14% over the same period, reaching a record £307.7 million in June. Apacs says, while domestic fraud has risen, 40% (£121.2 million) of this increase represents fraud aimed at UK customers but conducted abroad, where advanced Chip and Pin card security has not been implemented.

“Criminals continue to target those areas where we do not have the security benefits of Chip and Pin, causing increases in fraud abroad and phone, internet and mail order shopping fraud. Fraud abroad will be made more difficult for criminals to commit as more countries roll out Chip and Pin,” says Sandra Quinn, director of communications at Apacs.