Card and banking fraud back on the rise again

Banking and card fraud back on the rise again says the FFA UK as crime increasingly moves online.

Cyber Monday a fraud bonanza day
Cyber Monday a fraud bonanza day

New figures just released by Financial Fraud Action UK (FFA UK) claim to show that card and remote banking fraud increased during the first six months of 2014.

According to the fraud agency, the intelligence behind the figures reinforces recent trends, which have seen the growth of deception crimes seeking to persuade consumers to part with their personal and financial information, as well as criminals' use of computer viruses. As a result, customers are being warned to be vigilant and be aware of the key warning signs of scams.

The bad news is that online banking losses in the UK reached almost £30m in the first half of 2014, as criminals targeted the accounts of businesses - mostly with phishing attacks - that allow higher-value transfers.

In fact, the FFA UK says that fraud losses on UK cards totalled £247.6m between January and June 2014 - an increase of 15 percent on the same period last year.

Fraud expressed as a proportion of card purchases has remained flat at 7.4p for every £100 spent, the same proportion as the industry reported at the end of 2013.

Losses on remote banking fraud, however, rose to £35.9 million - up 59 percent from the £22.6 million reported in H1-2103 - within this total, online banking fraud losses rose to £29.3 million, up a hefty 71 percent from the £17.1 million reported in H1-2013.

Likewise with telephone banking, where H1-2104 fraud rose to £6.6m - up 20 percent from £5.5m seen in H1-2013.

Business advice

The fraud agency has some good advice to businesses on how to take steps to avoid becoming a victim of remote purchase fraud, which it says has become a major issue in the UK.

Retailers, it says, should ask their bank or card processor about the online protection offered by card schemes, such as Verified by Visa, SecureCode by MasterCard and American Express' 'Safe Key' - which help make transactions over the Internet safer from the threat of fraud.

Retailers should also know their customer, and assess a customer's profile, order and delivery details before accepting a transaction, as well as being wary of high value or unusual orders from customers you do not know, particularly if the product is easily resalable.

The FFA UK says that businesses can also use the banking industry's Address Verification Service (AVS), which compares the delivery address provided for the order with the billing address details for the payment card held by the card issuer.

Finally, the fraud agency says that businesses should maintain a record of fraudulent accounts and transactions to prevent further breaches, as fraudsters will continue to attack businesses until the window of opportunity is closed.

Keith Bird, UK managing director with Check Point, said that his firm's 2014 security report found that 88 percent of financial institutions experienced at least one data breach last year - which is consistent with the FFA UK's analysis of the rise in online banking fraud.

"Our report also showed that organisations sent sensitive data outside the business once every 49 minutes, with 33 percent of those incidents including credit card data or account numbers," he said.

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