Page last updated at 12:32 GMT, Thursday, 19 March 2009

Big jump in online banking fraud

Card on keyboard
Consumers are being urged to ensure they have anti-virus software

Software allowing fraudsters to track what you type led to the level of online banking fraud more than doubling in 2008, according to a banking body.

Fraudsters use a device called keylogging - when keystrokes on a computer are tracked to gather passwords and credit card numbers.

Online banking fraud jumped to 52.5m last year, up from 22.6m in 2007, said UK payments association Apacs.

Total fraud losses on UK debit and credit cards rose by 14% to 609m.

Most victims of card fraud are not liable, so their money is refunded.

Malicious programs

Online banking has become increasingly popular in recent years, with consumers becoming more comfortable using their home computers rather than queuing at branches.

Card fraud graph

But fraudsters tend to adapt to new technology more quickly than consumers, so online banking fraud losses have been rising steadily in recent years.

The 52.5m stolen from accounts in 2008 compares with 12.2m in 2004.

Malicious computer programs, including those that track what users type without their knowledge, generally find their way onto computers when users click on an unsolicited e-mail.

"The industry continues to remind customers to ensure that they have their computer's firewall switched on and anti-virus software up to date," said an Apacs spokeswoman.

Targeting cards

UK credit and debit card fraud had been falling following the introduction of chip-and-pin, but in 2007 and 2008 the figures have started to rise again.

Buy now button, SPL
The industry continues to remind customers to ensure that they have their computer's firewall switched on and anti-virus software up to date
Apacs

The biggest area of card fraud continued to be with goods bought over the internet, phone or by mail order - where chip-and-pin was not used. Fraud levels in these instances rose 13% to 328m.

The most significant rise in 2008 was when criminals took over other people's accounts, known as card ID theft, with losses up by 39% to 47.4m.

Apacs said that, although card fraud losses had increased during the last year, losses as a percentage of card turnover were falling, dropping to 0.12% of turnover in 2008 from 0.14% in 2004.

The group also stressed that over the last five years, the most rapid acceleration in fraud has not been in the UK, but by fraudsters using UK cards overseas.

This was usually in countries where chip-and-pin technology was not in place. Apacs said it was putting pressure on countries such as the US to introduce chip-and-pin.

Anyone in the UK who is a victim of fraud is not liable, under terms outlined in the Banking Code. As long as they have not acted fraudulently or without "reasonable care", they will be reimbursed if somebody uses their card, steals it, or clones it.

The code says that if somebody uses a card before it is reported lost or stolen, or somebody knows a Pin, then the victim could have to pay the first 50 that is lost.



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