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Online 'phishing' costs banks £60m |
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Business
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Written by Peter Warren
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Thursday, 29 April 2004 |
Bought and published by Evening Standard, April 29, 2004
SOPHISTICATED online fraud, known as 'phishing', has cost UK financial
institutions at least £60m. Attacks are said to have cost three large
British firms £20m each in compensation for defrauded customers and in
upgrading their internet security.
The figures dwarf the previous £1m estimate for the amount phishers
have cost British banks, and show that the problem is exploding to
epidemic proportions.
The websites of Barclays, Nat-West, Lloyds TSB, Halifax, Nationwide,
Citibank and MBNA and online market place eBay have been targets of
this new fraud. Experts fear UK supermarkets will be the next target.
At least one British-based gang is believed to be launching phishing
attacks. However, the main culprits are criminals in Eastern Europe,
with Romania suspected to be the world phishing headquarters. It is
thought four or five main gangs are responsible for most of the more
high-profile frauds, and estimates suggest that 5% of all emails now
sent may be phishing attempts.
The fraudsters use random emails that direct recipients to what appear
to be the websites of reputable financial institutions and ask them to
reveal account details, passwords and PIN numbers for cash machines. In
fact, these are spoof websites set up by the criminals to steal banking
details.
Most people ignore the mail because they are suspicious or because they
do not have an account with that organisation. But a small minority
reveal their account details, and in some cases have lost thousands of
pounds.
Police believe the gangs are recruiting technology and language
specialists to improve the quality of their bogus sites and mail.
'The emails are getting better in content and much more convincing,'
said Tony Neate, the National High-Tech Crime Unit's industry liaison
officer.
'In the past, the spelling was awful and they were mis-spelling key
words - now you can believe the email when you receive it. If people
get an email from a bank or retail outlet, they should subject it to
checks and not click on the link.'
The problem for banks and retailers is that, as well as being costly, the scams erode public trust in e-commerce.
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