Online banking increases with fraud threat

Online banking users have increased by 505 per cent in the last seven years, but so has the threat of fraud.

Data from payments association Apacs show 21 million people used online banking last year, compared with 3.5 million early adopters in 2000.

However, the first half of 2008 alone has seen 20,000 reported phishing incidents – where users are sent phony emails taking them to fake banking websites trying to get hold of their account details – compared with just over 5,100 cases two years ago.

Cases of spyware have also increased – where malicious code planted on your computer through a website or email tracks your movements on line and records details typed when accessing an account.

Sandra Quinn, director of communications at Apacs, said: “Online banking has changed the way we access our bank accounts, and is now second nature to many of us.

“In the future we expect more and more people to use online banking to make payments rather than just checking balances."

She added: "However, we strongly urge banking customers to make sure they remain wary of online scams such as unsolicited emails claiming to be from their bank, and to only use a fully protected PC with regularly updated anti-virus software and a firewall installed and switched on."

Losses from fraud will only be covered by banks if the customer is not at fault. Just as the bank will not pay out if you tell someone your PIN number, not having sufficient online protection means they are more likely to blame a loss on you.

Apacs has now published a Banking Safely Online guide available at www.banksafeonline.org.uk.

Advice includes:

• Spotting phishing emails
  One easy way to spot a phishing email is that, because fraudsters only have very limited information such as people’s email addresses, phishing emails are usually addressed to ‘Dear valued customer’ rather than to you personally.
• Revenge not so sweet
  Don’t try and hit back at fraudsters by replying to phishing emails and either deliberately providing bogus information or letting the sender know that you are aware it’s a scam – by doing so you are putting your PC at risk of attack from malicious computer viruses.
• Banks don't ask for your PIN
  Banks never send emails asking their customers to disclose PINs, login details or complete passwords - most fraud on online bank accounts involves a customer being duped into giving away their passwords and security information.
• Avoid unsolicited emails
  Be wary of unsolicited emails offering you the chance to make easy money simply by transferring funds in and out of your online bank account. The funds you receive into your account will probably be fraudulently-obtained, and by passing them on you will be laundering the money, which is illegal.