Online fraud continues to rise

Card fraud

Figures out this week from 2009 have shown that fraud on debit and credit cards may have fallen, but online banking fraud is still rising in the UK.

The figures show the first decrease in card fraud since 2006, as it fell 28 percent to GBP£440 million according to the annual figures from the UK Cards Association.

While card fraud showed a significant improvement, online banking fraud continued to rise, with total losses reaching just under GBP£60 million - a 14 percent rise on the year before.

As more and more consumers are persuaded to go online by their banks, criminals have followed them. Most of the fraud has seen criminals - usually based overseas - attacking consumers' computers without their knowledge.

It has been found that the most common technique is for criminals to install malware into a consumers' computer - a piece of software that can sense a users' keystrokes. This means that a criminal, no matter where they are, can tell the password and account number of an online bank account that a customer is typing in.

Graham Cluley, a leading expert on internet fraud at Sophos, a security firm, said to the British paper The Telegraph, "Every day we see 50,000 new pieces of malware from around the world coming into our labs. The criminals are always creating new, ever more sophisticated ways of attacking people's computers."

Card cloning

Cheque fraud fell by almost a third, partly attributed to the declining use of cheques, while the cloning of bank cards fell by over a half, thisismoney reported.

Although the drop in card fraud has been attributed to the use of chip and PIN, as well as fraud detection tools used by banks and retailers. Lost and stolen card fraud fell by 58 percent from 2004 to 2009 and is now at its lowest level for two decades. Losses at UK retailer level fell by 67 percent and mail non-receipt fraud dropped 91 percent since 2004. Counterfeit card fraud losses also fell to their lowest levels since 1999.

Phishing scams

Also contributing to the increase, is members of the public are still voluntarily handing fraudsters their personal details by falling victim tophishing scams, in which customers are tricked into entering their banking information into a fake website. There were 51,000 of these incidents in 2009, a 16 percent rise on the previous year.

David Cooper, chairman of the Fraud Control Steering Group, the payment industry's leading fraud prevention group, said of the non-plastic related fraud losses, "Although online banking fraud losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity. However, the industry remains committed to containing and reducing all areas of fraud. To this end, we will continue our partnership approach - working with law enforcement, retailers, consumers and the Home Office - to tackle fraud head-on."

Jodie Humphries

Jodie Humphries graduated from Bath Spa University with a BA Hons in Creative Writing in 2008. She has worked for GDS Publishing for the digital group since July 2009. She has previous experience with writing for the web, running her own website since April 2007.

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