Online banking fraud increases by 71% in a year - and surging numbers fall victim to sneaky telephone scammers

  • Online fraud is a major headache for banks who are pushing digital future
  • Telephone scams are also on the rise as This is Money sees surge in cases
  • Fraud on UK cards reach £248m - 15% higher than last year

Online banking fraud has exploded in 2014 with £29.3million worth of damage being done in the first six months, 71 per cent higher than at the same period last year.

In a major headache for banks who are trying to move away from branch banking, telephone fraud also soared to £6.6million, up 20 per cent on last year, according to the data from Financial Fraud Action UK.

Several small businesses have contacted This is Money recently after being targeted by online fraudsters and scammers. The FFA UK report confirms that criminals are targeting business accounts because they typically allow ‘higher value fraudulent transactions.’

Major headache: Online banking fraud soared in the first-half of the year as banks push us towards a digital future

Major headache: Online banking fraud soared in the first-half of the year as banks push us towards a digital future

A worrying trend has been the rise in criminals calling people at home while posing as the bank, police or representatives of other trusted departments.

These cold calls typically involve the fraudster tricking their victim into revealing personal or financial information, such as their four digit PIN or online banking details, transferring money into another account or accepting a courier into the home to pick up a bank card.

 

Research shows a quarter of customers do not take steps to challenge the identity of a cold caller, with this figure rising to 34 per cent of 18-24 year-olds.

FFA UK intelligence also shows an increasing number of criminals are using computer viruses to steal personal and financial information, another theme that This is Money has picked up on in the last 18 months.

FFA UK says it strongly endorses the call to action by the National Crime Agency last month for people to download and update their security software and also urges customers to download software offered by their bank.

Detective Chief Inspector Perry Stokes, head of the dedicated cheque and plastic crime unit, said: ‘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.

 

‘Be aware of the warning signs: your bank will never ask you for your 4 digit PIN, to transfer or withdraw money, or to give your card to a courier.

‘We are asking members of the public to pass this information on to any family and friends who may be unaware, and echo calls made last week by the Commissioner of City of London Police for a national awareness-raising campaign led by government.’

Figures show losses on UK cards totalled £247.6million in the first six months of the year – 15 per cent higher than 2013. Fraud as a proportion of spending, has, however, remained flat at 7.4p for every £100 spent.

Losses on remote card purchases – those made online, over the telephone or by mail order – rose to £174.5million in the first six months, up 23 per cent on last year, with e-commerce fraud making up £110million of this.

FFA UK says while this is significant, it needs to be viewed in the context of the increase in internet shopping, with spending up from an estimated £40.5billion in the first half of 2013 to £47billion this year.

Elsewhere, cheque fraud fell 34 per cent in a year while counterfeit card fraud rose by four per cent in the first half of the year.

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