Banks delay online fund transfers in bid to fight phishing

Banks delay online fund transfers in bid to fight phishing

Four of the UK's largest banks are delaying intra-bank online payments between accounts in an attempt to combat security breaches caused by online phishing attacks.

According to a report by The Times, Barclays, HBOS, Royal Bank of Scotland and NatWest have each moved to delay real-time online transfers in an effort to limit losses from phishing attacks.

A spokesperson from Barclays, which has introduced a one day delay for transfers, told The Times that the delay "enables us to carry out checks that seek to prevent fraud".

Direct fraud losses from online phishing scams in the UK reached £12m in 2004, according to stats from the Association for Payment Clearing Services (Apacs).

The UK's banks are expected to agree a common industry standard for two-factor authentication of online transactions next month in a bid to cut card-not-present fraud and losses from phishing scams. Banks are expected to begin distributing authentication devices to online customers in the next nine to 12 months.

Separately, UK banks are being forced to speed up account-to-account consumer payments clearing processes under an official crackdown to be launched later this month, according to a report by the Sunday Tiumes.

Despite technology that would allow the funds to be transferred instantly, there is still a gap of three to five days for a customer's account being debited and a recipient being credited with a payment. But under a new deal between the Office of Fair Trading (OFT) and the banks, funds leaving an account should reach the recipient the same day.

An OFT source told the Sunday Times that an agreement has been reached and the implementation process is already under way. Although the change is initially voluntary, banks will face the prospect of enforced reform through legislation if they do not cut delays.

According to the report, systems dealing with direct debits, standing orders and other electronic payments will be the first to be speeded up, with cheque clearing expected to follow.

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