Fraudulent online banking activity continues to show a marked increase, according to figures released by Financial Fraud Action UK.
The 12% increase – to £39.6m in 2012 from £35.4m in 2011 – has been largely driven by fraudulent websites which trick consumers into divulging their online banking login details. Such phishing emails and websites were on the rise for most of 2012. They are intended to deceive vulnerable customers into believing they are communicating with their bank or building society, whereas in fact they are revealing their login details, passwords and other personal data to fraudsters.
The banking industry is working with the Serious Organised Crime Agency (SOCA), the Police Central e-crime Unit (PCeU), overseas law enforcement agencies, technology companies and internet service providers to combat the illegal practice. This has led to phishing incidents falling significantly during the final quarter of 2012, as has the introduction of online banking password generators.
Overall banking fraud losses fell by 25% from £16.7m in 2011 to £12.6m in 2012, reflecting the success of procedures used by banks to confirm customers’ identity in telephone transactions. However, this has contributed to the increase in online banking fraud.
Losses on 'cardholder not present' transactions (online and telephone) rose by 11% in 2012, but this can be partially explained by a sharp 18% increase in online card spending, which reached £63 billion over the last year.