UK suffering fraud boom-time

The number of phishing scams in the UK has escalated by 1,471 per cent in the last 12 months, the latest fraud figures from the UK payments association APACS revealed.

The huge hike in phishing equates to 5,059 scams reported in the first six months of 2006, compared with only 312 incidents over the same time period in 2005. And this had contributed to an overall hike of 55 per cent in all incidences of bank fraud.

Typical phishing scams rely on a spoofed website, made to look like the site of a bank or popular e-tailer's site, such as Amazon or eBay, where the unsuspecting user submits personal information such as bank or credit card details to the website.

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There is also a 55 per cent rise in losses from online banking fraud, equating to £23m in the first half of 2006.

Sandra Quinn, director of communications at APACS, told silicon.com: "It was inevitable that [online banking fraud] would go up."

Quinn said most of the 55 per cent increase in online banking fraud is due to the huge hike in the number of phishing scams being launched but in real terms the number of people falling for phishing scams has actually increased less than last year's figures.

Quinn said it appears people are getting wise to phishing scams at last. "I would worry if online banking had gone up the same amount as phishing [as this would indicate every phishing incident had caused an incident of fraud," she said.

Phishing can cost a company big bucks, with the Bank of Ireland coughing up €160,000 for phishing victims of late.

Cash machine fraud was also up 37 per cent for the first six months in 2006, compared with the same period in 2005.

Quinn said fraudsters are now moving from the retailers to cash machines as chip and PIN stopped fake cards being used in shops.

Quinn added that when the research was done not all cash machines were using the chip and PIN technology, so this figure is expected to decrease in the second half of 2006, and the next step in beating the fraudsters is installing anti-skimming technology onto cash points.

A typical skimming scam, involves fraudsters attaching a device to the entry slot of the cash machine to record the details of the card's magnetic strips as they are inserted into the machine. In advanced stings a miniature camera is hidden overlooking the PIN pad which allows the criminals to capture the PIN number as well. Alternatively the scammer can 'shoulder surf' - read over the victims shoulder as they enter their PIN.

Quinn said: "None of the anti-skimming technology is foolproof. Banks will wait to see what works [before investing in the technology]." Lloyds TSB began installing anti-skimming devices in all its UK ATMs earlier this year.