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Leading banks hit by security problems

Stuart Finlayson
Thursday 12 July 2001 03:20
Two of the UK's largest banks are expected to ask searching questions of their security systems after two separate incidents cast doubts over the safety of customers' accounts.

The first case affected customers at a branch of Lloyds TSB in Swindon, as card fraudsters used debit card details to plunder thousands of pounds from current accounts.

In one of the first examples of a UK bank confirming customer account fraud, Lloyds TSB said fewer than 100 customers had been affected and that those who had lost money had been reimbursed and issued with new cards. The bank claimed that no other branches were affected.

Lloyds TSB said it became aware of the problem after its fraud department noticed anomalies in some current accounts, although the bank would not divulge what the anomalies were nor how the money was taken.

The second security scare came when Barclays mistakenly sent out statements containing other people's account and credit card details to 1,500 customers. The affected customers received the wrong quarterly statements, which are sent out to some customers in addition to their monthly statements.

The bank said it intended to issue letters of apology to all the affected customers, but at the same time stressed that customers were not at risk of losing money from their accounts as a result of the error.

A spokeswoman from Barclays said, "We are currently investigating the cause. In the meantime we will not be issuing any quarterly statements until we find out what has been involved. No customers would have lost any money as a result of this and no one could have done anything with the information."

The incidents will do little to quell the fears of an already wary public as to the adequacy of measures put in place by the major banks to prevent credit card fraud, which is estimated to have cost £350m last year.