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07 October 2009 | 10638 views | 1
The UK financial services industry experienced a 55% spike in losses from online banking fraud in the six months to June 2009 as cybercrooks adopted more sophisticated tactics to dupe consumers.
Financial Fraud Action UK results released yesterday clearly show that the battle against fraud is far from over in the UK. Despite this, the statistics suggest that the UK is doing comparatively well in the relation to many other countries.
The findings highlight where the UK is doing well and where we are failing. Firstly, face-to-face retail card fraud has fallen, possibly because criminals are shifting to target easier to attack foreign-issued non chip and PIN cards. Secondly, there has
been a significant step forward in the fight against CNP fraud, which has fallen for the first time, in spite of the continued growth in e-commerce sales. This might be due to renewed focus by industry initiatives like MasterCard SecureCode and Verified by
Visa. Maybe consumers are also becoming more e-savvy, or are they?
Whilst consumers appear to be more aware in terms of e-payments, the same cannot be said for online banking. Statistics for online banking fraud have risen dramatically – by more than 50%. More sophisticated phishing and malware attacks that target vulnerabilities
in customer’s PCs are cited as being the cause of the increase. So what can be done to reduce this kind of fraud? The use of CAP card readers to generate a one-time password uniquely authorising on-line banking payments can have a significant impact. Indeed,
Barclays has stated that there were no incidences of on-line banking fraud following the roll-out of card readers. However, not all banks use this kind of technology.
Whilst it appears that steps forward have been made, there is always more to do. Fraud is unlikely to ever disappear entirely, however by putting up barriers against criminals, such as chip and PIN and card-readers, banks and merchants can significantly
reduce the risk.