UK Online Banking Fraud Rockets 71% in 2014

E-commerce fraud jumped by nearly a quarter year-on-year to reach £110 million in the first half of 2014, while online banking fraud rose 71% to hit £29m, according to the latest stats from Financial Fraud Action UK.

The industry body tried to play down the figures, claiming that the online fraud stats need to be seen in context of an explosion in e-commerce spending, which stood at an estimated £47bn in the first half of 2014.

It added that the implementation of chip and PIN plus advanced fraud screening systems by banks has forced the criminal fraternity to target individuals and businesses.

It explained:

“An increasing problem has been criminals telephoning people at home while posing as the bank, police or representatives of other trusted organisations, such as Government departments. These cold-calls typically involve the fraudster tricking their victim into revealing personal or financial information, such as their 4 digit PIN or online banking details; transferring money to another account; or accepting a courier into their home to pick up their card.”

These details are then used in either telephone or online banking fraud or to target online shoppers using sites which “have not introduced adequate internet shopping protections.”

When it comes to online banking fraud, Financial Fraud Action UK said it believes criminals are increasingly targeting business accounts, as they often allow for higher value transactions.

On the positive side, contactless card fraud stands at £51,000 – just 0.007% of contactless spending.

“Be very suspicious of phone calls, texts or emails which come out of the blue asking for personal or financial details, regardless of who they claim to represent,” said Perry Stokes of the City of London police in a prepared statement.

“Be aware of the warning signs: your bank will never ask you for your four digit PIN, to transfer or withdraw money, or to give your card to a courier.”

Data from Worldpay, the UK’s largest payment processor, found that businesses have been forced to pay out £878,000 over the past three years due to breaches of card data – 61% of which were small firms in 2013.

“Fraudsters go after low-hanging fruit. Small businesses are easy prey, so it’s a real worry so many small businesses still don’t see the value in compliance,” said Worldpay managing director, David Hobday.

“If we want to see genuine change, it’s important we support small business owners. A data breach can be financially crippling – just the investigation alone can cost thousands of pounds, not to mention fines and loss of reputation.”

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