UK banks report lower online banking and card payment losses

The drop comes as a result better fraud detection systems, say industry trade groups

U.K. banks reported sharply lower levels of online banking fraud and counterfeit cards in 2010, a sign the industry may be getting better at deflecting attacks from cybercriminals.

Online banking losses came in at £46.7 million (US$76.5 million), according to the latest figures from the U.K. Cards Association and Financial Fraud Action U.K., both industry trade groups.

Still, the figure was the second-highest in the last five years. In 2009, banks recorded £59.7 million in losses.

The groups attributed the 22-percent drop between 2009 and 2010 to consumers using up-to-date antivirus software and the use of sophisticated fraud detection software by banks. The decline occurred even as phishing attacks -- which aim to trick people into divulging passwords and other sensitive information -- rose by 21 percent last year over 2009.

Losses attributed to counterfeit or cloned cards fell by 41 percent to £47.6 million, down from £80.9 million in 2009.

Throughout Europe, banks issue chip-and-PIN (Personal Identification Number) cards, which use a secure and hard-to-copy microchip to verify a person's secret 4-digit code in point-of-sale devices or ATMs.

Those cards, however, still have a magnetic stripe on the back containing the account details. If criminals can make a card with a copy of a U.K. card's magnetic stripe data, they can use their cloned card in ATMs and point-of-sale (POS) terminals in countries that haven't yet adopted chip-and-PIN.

One way to obtain that data is from skimming devices, attached by fraudsters to ATMs to read the card's magnetic stripe as it is inserted into the machine. Awareness of skimming has increased over the last few years, with many machines labeled with warnings asking people to report if an ATM appears to have been tampered with.

A copy of the magnetic stripe data is also contained in the chips on the cards, though, and is transmitted in the clear to POS terminals to make a transaction. By tampering with a terminal, criminals could intercept the chip's copy of the data and put it on the magnetic stripe of a cloned card.

However, banks have been issuing an updated type of chip-and-PIN card to prevent that type of fraud. Since 2008, U.K. banks have issued up to 129 million cards with slight differences between the data on the chip and that on the magnetic strip, preventing a card cloned using chip data alone from working in a country where only the magnetic stripe is read.

Other categories that saw declines included card-not-present fraud, where harvested card details are used in, for example, e-commerce transactions. That kind of fraud fell to £226.9 million in 2010, down 22 percent from 2009's loss of £266.4 million.

The decline was attributed in part to the use of 3-D Secure (3DS), an e-commerce security system better known as Verified by Visa or MasterCard SecureCode. The system requires a person to enter a password or portion of a password in response to a personalized challenge from their bank in order to complete an online purchase.

Send news tips and comments to jeremy_kirk@idg.com

Join the PC World newsletter!

Error: Please check your email address.

Tags securitydata breachDesktop securityfinanceindustry verticalsIdentity fraud / theftmalwareFinancial Fraud Action UKfraudUK Cards Association

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jeremy Kirk

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?