UK online banking fraud sees big increase but losses only at 2009 level

There was a 48% rise in the amount of money stolen from UK online bankers last year as criminals pilfered more than £60m

There was a 48% rise in the amount of money stolen from UK online bankers last year as criminals pilfered more than £60m through a total of 53,192 incidents, according to figures from Financial Fraud Action UK (FFA).

Total fraud on UK-issued cards was £479m in 2014 – 6% more than in 2013.

Online fraud losses showed a downward trend in 2010 and 2011, but have risen in the three years since, with the £20m increase in 2014 dwarfing the £1.3m and £4.2m rises in the previous two years. The 2014 figure is almost the same as in 2009, when £59.7m was stolen, but there are many more people banking online now than in 2009.

The FFA described the number of incidents of online theft as modest given that 53% of the UK’s adults – 26.9 million – bank online. The proportion of people that bank online will inevitably increase further as banks close branches in rural communities to cut costs, and younger people who have grown up with on-demand services enter adulthood.

Detective chief inspector Perry Stokes, head of the Dedicated Card and Payment Crime Unit, said up-to-date security software offers vital protection. “It is also important that you don’t allow criminals access to your computer by neglecting basic precautions,” he said. “To beat the fraudsters, make sure you have up-to-date anti-virus software to keep one step ahead.”

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In November, a University of Cambridge researcher told a Treasury select committee that the actual amount of money being taken from people's accounts through cyber crime is twice as much as the amount reported, because banks often recover losses without reporting them.

Speaking at a meeting about finance firms' treatment of customers, Dr Richard Clayton, a senior researcher in security economics at the University of Cambridge, said: “Insiders tell me the going rate is about twice the amount of money [reported by banks] goes walkies out of people’s accounts.” Banks keep this figure secret because a lot of it is recovered, he added.

Online banking is the most used digital service in the UK, according to research by Fujitsu. Some 67% of people surveyed said they bank online.  But the fear of online fraud is worrying banks.

Kansas City Central Bank in the US has launched a prepaid bank card that users can switch off when it is not in use, to prevent hackers accessing funds. The Blinx On/Off card from Veritec allows the user to turn the card off and back on quickly by calling an automated system or with a few online keystrokes.

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