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Online banking fraud 'up 8,000%' | Online banking fraud 'up 8,000%' |
(about 14 hours later) | |
The UK has seen an 8,000% increase in fake internet banking scams in the past two years, the government's financial watchdog has warned. | The UK has seen an 8,000% increase in fake internet banking scams in the past two years, the government's financial watchdog has warned. |
The Financial Services Authority (FSA) told peers it was "very concerned" about the growth in "phishing". | The Financial Services Authority (FSA) told peers it was "very concerned" about the growth in "phishing". |
Phishing involves using fake websites to lure people into revealing their bank account numbers. | Phishing involves using fake websites to lure people into revealing their bank account numbers. |
The amount stolen is still relatively small but it is set to go up by 90% for the second year running, peers heard. | The amount stolen is still relatively small but it is set to go up by 90% for the second year running, peers heard. |
Between January and June 2005, the number of recorded phishing incidents was 312, the Lords science and technology committee was told. | Between January and June 2005, the number of recorded phishing incidents was 312, the Lords science and technology committee was told. |
The figure for the same period this year was 5,059, according to banking trade body Apacs figures. | The figure for the same period this year was 5,059, according to banking trade body Apacs figures. |
The amount of cash stolen in the first half of 2006 was £23.2m, the committee was told, and was likely to be £22.5m in the second half of the year. | The amount of cash stolen in the first half of 2006 was £23.2m, the committee was told, and was likely to be £22.5m in the second half of the year. |
'Industrialised' | 'Industrialised' |
The increase was put down by Apacs security chief Philip Whitaker to better detection. | The increase was put down by Apacs security chief Philip Whitaker to better detection. |
But Mr Whitaker told peers the criminals behind "phishing" scams were also becoming increasingly "industrialised" in their approach. | But Mr Whitaker told peers the criminals behind "phishing" scams were also becoming increasingly "industrialised" in their approach. |
Lord Paul said the committee had been told one bank was being targeted far more than any other. | Lord Paul said the committee had been told one bank was being targeted far more than any other. |
But Apacs director of communication Sandra Quinn rejected the peer's call to name the bank concerned, saying it would breach commercial confidentiality. | But Apacs director of communication Sandra Quinn rejected the peer's call to name the bank concerned, saying it would breach commercial confidentiality. |
She said Apacs was there to represent the banking industry not the consumer, and had no plans to make public its list of banks being targeted by fraud. | |
Alarm | Alarm |
Mr Whitaker said just because a bank had been targeted, did not mean its security systems were worse than its competitors. | Mr Whitaker said just because a bank had been targeted, did not mean its security systems were worse than its competitors. |
"There is no evidence that one bank is any worse or any better-off than another," he told the committee. | "There is no evidence that one bank is any worse or any better-off than another," he told the committee. |
He also rejected a call for banks to routinely inform customers of security breaches involving their details, such as when a bank employee's laptop was stolen. | He also rejected a call for banks to routinely inform customers of security breaches involving their details, such as when a bank employee's laptop was stolen. |
He said banks did not want to cause undue alarm to customers, as had been in the case in some US states, where customers were constantly given such information. | He said banks did not want to cause undue alarm to customers, as had been in the case in some US states, where customers were constantly given such information. |
Rob Gruppetta, of the FSA's financial crime team, said "phishing" was growing rapidly in the UK. | |
"We are very concerned about the rate of increase. It has gone up by 8,000% in the past two years. | "We are very concerned about the rate of increase. It has gone up by 8,000% in the past two years. |
"But in the grand scheme of total fraud it is still quite small." | "But in the grand scheme of total fraud it is still quite small." |
'Wary' | 'Wary' |
Even so, he said the scams were becoming "more sophisticated," compared to the primitive early examples. | |
Philip Robinson, the FSA's head of financial crime, said he believed internet banking was generally "safe". | Philip Robinson, the FSA's head of financial crime, said he believed internet banking was generally "safe". |
But he raised concerns about the banks' apparent lack of transparency when it came to internet fraud. | But he raised concerns about the banks' apparent lack of transparency when it came to internet fraud. |
He said they were "wary" about making concerns public in case the information was "misrepresented". | He said they were "wary" about making concerns public in case the information was "misrepresented". |
They were also reluctant to report incidents to the police, he said, because "the likelihood of fraud being investigated is very low indeeed". | They were also reluctant to report incidents to the police, he said, because "the likelihood of fraud being investigated is very low indeeed". |
He said being "open and transparent" was important to "maintain confidence" in the banking system and he would be meeting the Information Commissioner next week to discuss ways of increasing transparency. | He said being "open and transparent" was important to "maintain confidence" in the banking system and he would be meeting the Information Commissioner next week to discuss ways of increasing transparency. |
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