Online banking fraud 'up 8,000%'

The UK has seen an 8,000% increase in fake internet banking scams in the past two years, the government's financial watchdog has warned.
The Financial Services Authority (FSA) told peers it was "very concerned" about the growth in "phishing".

Phishing involves using fake websites to lure people into revealing their bank account numbers.

The amount stolen is still relatively small but it is set to go up by 90% for the second year running, peers heard.

Between January and June 2005, the number of recorded phishing incidents was 312, the Lords science and technology committee was told.

The figure for the same period this year was 5,059, according to banking trade body Apacs figures.

The amount of cash stolen in the first half of 2006 was £23.2m, the committee was told, and was likely to be £22.5m in the second half of the year.

'Industrialised'

The increase was put down by Apacs security chief Philip Whitaker to better detection.

But Mr Whitaker told peers the criminals behind "phishing" scams were also becoming increasingly "industrialised" in their approach.

Lord Paul said the committee had been told one bank was being targeted far more than any other.

But Apacs director of communication Sandra Quinn rejected the peer's call to name the bank concerned, saying it would breach commercial confidentiality.

She said Apacs was there to represent the banking industry not the consumer, and had no plans to make public its list of banks being targeted by fraud.

Alarm

Mr Whitaker said just because a bank had been targeted, did not mean its security systems were worse than its competitors.

"There is no evidence that one bank is any worse or any better-off than another," he told the committee.

He also rejected a call for banks to routinely inform customers of security breaches involving their details, such as when a bank employee's laptop was stolen.

He said banks did not want to cause undue alarm to customers, as had been in the case in some US states, where customers were constantly given such information.

Rob Gruppetta, of the FSA's financial crime team, said "phishing" was growing rapidly in the UK.

"We are very concerned about the rate of increase. It has gone up by 8,000% in the past two years.

"But in the grand scheme of total fraud it is still quite small."

'Wary'

Even so, he said the scams were becoming "more sophisticated," compared to the primitive early examples.

Philip Robinson, the FSA's head of financial crime, said he believed internet banking was generally "safe".

But he raised concerns about the banks' apparent lack of transparency when it came to internet fraud.

He said they were "wary" about making concerns public in case the information was "misrepresented".

They were also reluctant to report incidents to the police, he said, because "the likelihood of fraud being investigated is very low indeeed".

He said being "open and transparent" was important to "maintain confidence" in the banking system and he would be meeting the Information Commissioner next week to discuss ways of increasing transparency.

Woah thats HUGE.. I mean look at the percentage..

Yup..thats why i pasted it here..right 8000 %..Thats huge bro!

OMG its Increasing Day By Day and Still ppl Are becoming their Prey.

wat They gonna Do in Upcoming years ?

Blank...dnt know ..still thinking