Huge rise in remote banking fraud

Criminals resorting to non-digital methods too to try to steal our money

Updated: 
huge rise in remote banking fraud

Financial fraud prevention body Financial Fraud Action UK (FFA UK) is warning us to be vigilant with our personal and financial details after a sharp rise in remote banking fraud.

Figures show that this type of fraud has gone up by a massive 59% in the first six months of this year compared to the same period last year.

Here's a rundown of what the criminals are doing, and what you should do to combat them.

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Cyber stealing

In keeping with the digital age, the most common way criminals steal your information is online. There has been a 71% rise in online banking fraud losses in the first six months of this year compared to 2013, totalling £29.3 million. Meanwhile, telephone banking fraud rose 20% on last year to £6.6 million.

Online fraudsters mostly go for phishing and malware when scamming their targets. The former method is an email claiming to be from your bank or another organisation such as a Government department. The email asks you to click on a link which takes you to a deceptively identical, but fake, website. The criminals gain access to accounts when victims unknowingly give them security information through the fake site.

Malware (malicious software) is a type of virus that infects your computer and runs without your knowledge. Some malware can log your keystrokes, capturing your passwords and personal information.

As you can imagine, businesses are targeted as they tend to have more cash than personal accounts.

Losses made on remote card purchases, i.e. web, phone and post, rose to £174.5 million in the first six months of this year. This means that the total loss from so-called e-commerce fraud is estimated at £110 million, up 23% on 2013.

That said, we are doing a significantly greater amount of spending online. It currently stands at an estimated £47 billion, as reported for the first half of 2014.

More traditional methods

An increasing number of incidents involve telephone scams known as 'vishing'. With all of the sophisticated technology criminals have at their disposal, this method of scamming is pretty old school. The criminal phones the victim at home claiming to be their bank, police or other trusted representative. They then ask the victim for their online account details or PIN number. Some even come to the person's home to collect a bank card that needs to be replaced (or so they think).

Criminals then commit fraud through telephone or online banking or through shopping online. Retailers who haven't introduced safe internet shopping protection are often targeted by these types of fraudsters.

Surprisingly, a quarter of us don't take steps to challenge the identity of cold-callers, says ICM. The 18-24 age group is even less savvy, with 34% not questioning the dubious callers.

Similarly, 'distraction thefts' at shops and ATMs increased thefts on lost or stolen card to £29.2 million, up 3% on the first half of 2013.

The outlook may be a little rosier with the advent of contactless cards, thankfully. The fraud rate on them is a tiny 0.007%. It seems the fraudsters haven't found a way around them yet.

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How to stay safe

Police and fraud experts warn that account holders should be careful, highlighting that banks will never:

- ask for your PIN or full online or telephone banking security codes over the phone;
- ask you to withdraw money to hand over to them, or transfer money to another account, even if they say the account is in your name;
- come to your house to get your cash, payment card or cheque book;
- ask you to purchase goods using your card and then hand them over for safe keeping.

It's always best to double check unsolicited emails from your bank by speaking to them over the phone. Just don't click on any links (even if it is promising you a free boat).

As for your PIN, make sure you're the only person who knows it. Use your free hand to shield it while you're at a cash machine to stop those sneaky distraction thefts.

Online passwords are just as important and arguably easier to get hold of. Check out our guide on how to protect your PINs and passwords to create safe passwords for all of your internet accounts.

Make sure you shop on secure websites. If in any doubt, check for an "https" prefix with a padlock next to it in the URL when you're placing an order.

Of course, check your bank statements regularly and if you don't already, go paperless! If not, make sure you shred your statements when you dispose of them.

What is being done to tackle these crimes?

The industry-sponsored Dedicated Cheque and Plastic Crime Unit (DCPCU) identifies and targets organised criminal gangs responsible for payment fraud. They also share information on emerging threats and patterns in fraudulent activity.

To get customers in the know, FFA UK is launching a vishing awareness initiative, encouraging account holders to be more vigilant with their details.

The industry body is fully supportive of the National Crime Agency's bid for customers to download and update their anti-virus software regularly.

The likes of Barclays, HSBC, MBNA, HSBC and Clydesdale all offer free anti-virus software downloads straight from their websites.

Otherwise, try Microsoft Security Essentials for Windows or CLAMXAV 2 for Mac – they're both free.

Do you challenge cold-callers' identities? Have you ever been a victim of remote banking fraud? Tell us in the Comments below.

Had enough of your bank? Earn £100 or up to 5% interest by switching to a top account

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