Internet fraud is up,... and down
The UK Banking Association, APACS, reports that incidents of attempted fraud have doubled compared to this time last year, but actual banking losses are down. However, that is not as reassuring as it might sound.
One source of fraud is the so-called "phishing" email claiming to be a security advisory from your bank and asking you to login using the link in the email and reconfirm your account details and PIN codes. I receive several of these each day, often for banks I have no dealings with, at email addresses I have never used for online banking, and I expect you do too. The scammers continue churning these out which suggests that there must still be a ready supply of gullible victims who fall into the trap. Remember that the Banking Code now means that customers could be held liable for losses if they negligently hand over bank details to the phishers, or allow it to be stolen off their screens by spyware.
Security firm RSA which monitors these trends reports that UK banks are the second most targetted in the world. In addition, there has been a significant widening of the net over the past year as the crooks are now targeting the smaller banks and financial institutions.
With the advent of Chip and Pin, the bulk of credit card fraud has now switched to remote purchasing by telephone and over the internet, much of it carried out by organised crime rings in other countries. Earlier this month, Symantec found that banking details were selling for as little as £5 per account as part of a thriving trade in stolen information.
If you are unlucky enough to have your credit card number used in a fake purchase then, as long as you haven't been negligent, the bank will not charge you anything, but we should also remember that it doesn't cost the bank anything either. In cases of disputed transactions, it is the retailers who bear the cost. They are the ones who have provided the goods or services, which are never to be seen again. They are the ones who bear the immediate burden of these crimes.
Investigations by the BBC puts the cost of credit card fraud at around £300 million a year in the UK. To put that into context, that is 50% more than the government spends on its entire portfolio of websites.
16th May 2008
This article comes from the SKILLZONE email newsletter, published monthly since January 2008, and covering topics related to technology and the internet. All articles and artwork in the SKILLZONE newsletter are orignal content.