Bank fraud moves online

 

Gallery

Posted on 11 Mar 2010 at 11:47

UK credit and debit card fraud has dropped for the first time in four years. Figures announced by The UK Cards Association claim that 28 per cent less money was stolen via card fraud in 2009 than was pinched in 2008. The apparent success is attributed to the fraud detection systems operated by banks and retailers. The cloud to this silver lining is that online banking fraud has risen by 14 per cent, which indicates that the bad guys have moved on from stealing cards in the physical sense and are now operating in the murky world of the online underground.

While a reduction in any sort of crime sounds like good news, the current figures are still very high. All card fraud in 2009 accounted for £440.3m of stolen funds. Only £47.9m of that was due to lost or stolen credit cards. The biggest chunk of the money was stolen by phone, internet and mail order fraud. In these cases, which added up to £266.4m in 2009, the card was not present when the transaction was made. This represents a reduction of 19 per cent from the previous year, when £328.4m was stolen in this way.

Online banking fraud is a separate issue to card fraud. Not only is it on the rise but it is potentially harder to detect than card fraud. Online criminals are increasingly turning to malware to steal banking details from victims, which gives them an edge over anti-fraud systems. Mel Morris, CEO of security firm PrevX, told us that the criminals are not just satisfied with spending money on their victim's credit cards. "Account takeovers are up too," he said. "Criminals can take ownership of a bank account by changing the registered address and emptying it of funds. Those types of activities require human intervention to detect."

Banking data is stolen after victims fall foul of Trojans, an internet threat that is deployed regularly by criminals to steal personal information. This malware is supported by large, illegal networks of infected computers that are organised into 'botnets'. Morris also believes that the malware problem may be even bigger than some think. "Some say that the Zeus Trojan infection rate is one in 200 PCs. We think it's closer to one in one hundred. There are over 1,000 active botnets as we speak."

So while it's great that your credit card is less at risk of being whipped out of your pocket and taken on a spree down Oxford Street, the bad news is that your credit is more likely to be attacked from the internet. According to Morris, "online fraud is this decade's problem."

Author: Simon Edwards