Despite an overall drop in card fraud losses, the amount of money lost to online banking fraud last year rose by 14 per cent, according to figures released today by the UK Cards Association.
The Association, which represents the cards industry in the UK with a membership that includes all major credit, debit and charge card issuers and card acquiring banks, said criminals have switched their attentions from internal bank systems, which are notoriously difficult to attack, to individual household computers.
Online banking losses totalled £59.7 million in 2009 - a 14 per cent rise on the 2008 figure. This increase is largely due to criminals using more sophisticated methods to target online banking customers through malware, which targets vulnerabilities in customers' PCs, rather than the banks' own systems, which are more difficult to breach.
There were also more than 51,000 “phishing” incidents, where fraudsters lead customers to fake bank websites via an email that purports to come from their bank, recorded during 2009 - a 16 per cent increase on the amount seen in 2008. This compares to just 1,700 such attacks five years ago.
As a result, online banking losses totalled almost £60 million in 2009 compared to £52.5 million in 2008 and £23.2 million in 2005.
Phone banking losses, which were recorded for the first time in 2009, totalled £12.1 million, with most losses involving customers being duped into disclosing security details through cold calling.
Despite the sharp increase in online losses, overall fraud on debit cards and credit cards fell by more than a quarter compared to the previous year – the first time card fraud has decreased since 2006. However, it still costs the industry £440 million a year, which is only slightly down on the 2005 figure.
Cheque fraud losses decreased from £41.9 million in 2008 to £29.8 million in 2009. The overwhelming majority of attempted cheque frauds get stopped before the cheque is paid, says the UK Cards Association.
Fraud figures released by the National Fraud Authority (NFA) in January 2010 serve to put the banking fraud losses into perspective. The NFA estimated that fraud in all its guises costs the UK over £30 billion a year - card and banking fraud accounts for less than 2 per cent of this figure.
"The cards industry sees fighting fraud as a key part of keeping its customers' interests centre-stage,” said Melanie Johnson, Chair of The UK Cards Association
“We are committed to a wide range of measures to ensure customers feel confident, safe and secure when they use their credit and debit cards - whether in a shop, abroad, online, at a cash machine or anywhere else.
"And a fall in card fraud is good news for everyone - UK consumers, retailers and the industry. We recognise that cards will always be targeted by criminals, so we are determined not only to continue to prevent, detect and deter those who are behind this type of crime, but also to make sure that innocent victims don't lose out."
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