UK financial institutions are failing to report incidents of cyber fraud to the police because they are worried about the damage to their reputations, according to a report by UK newspaper The Guardian.
Detective Superintendent Russell Day of the Metropolitan Police told an all-party parliamentary group on identity fraud that many banks were failing to report attacks on their systems either due to concerns over customer confidence or because a lack of confidence in the ability of the police to deal with cyber crimes.
He stated that if a bank had been a victim of another sort of crime such as arson, they would immediately inform the police of it.
Day, who is from the Met's economic and e-crime unit, told MPs that "botnets" - networks of infected home PCs that can be used to launch attacks on bank security systems and send out spam e-mail - were one of the biggest threats to UK financial institutions.
Figures relesed earlier this year by the UK's National Consumer Council (NCC) showed that ID theft is estimated to cost the UK economy £1.7 billion annually and affects more than 100,000 people every year.
But Nigel Evans, the Tory MP who chaired the hearing, said Day's admission indicated that the true cost of ID theft could be much higer than the official figure of £1.7 billion a year.
Losses from online banking recorded the biggest year-on-year increase in the six months to June 2005, growing 55% to £22.5 million, according to stats from the Association for Payment Clearing Services (Apacs). The rising crime figures coincided with a 1471% surge in reported phishing incidents to over 5000 cases, from 312 in the same period a year ago.