Banks need to do more to combat internet fraud

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Banks need to do more to combat internet fraud

Fri, 28 Aug 2009

Security for online banking customers varies greatly according to a new survey by Which? Computing .

The main high street banks were tested and the results make compelling reading. Top of the list for good security is Barclays. Next were First Direct, Lloyds TSB, Nationwide, NatWest and Royal Bank of Scotland who were rated 'good' and the Alliance and Leicester and HSBC were 'average'.

Halifax in particular was criticised by the magazine. To log on their accounts Halifax customers have to enter three pieces of information, all three must be typed out in full. This makes customer log in information vulnerable to software such as keylogger.

Barclays were praised by the magazine for their use of PIN numbers as well as using drop down menus adding to their online security .

A spokesperson for Halifax told Sky News said, "The vast majority of our fraud defence is not visible to customers and we deliberately seek to provide security which does not adversely impact our customers' ability to bank with us online."

In 2008 online banking fraud reached £52.5m according to the UK Payments Administration (formerly APACS) almost double the £22.6m I 2007. The huge rise is blamed on keylogging Trojans.

The way keystroke loggers work is that they record what online customers' type when visiting banking sites. This information is then uploaded onto cybercrime servers. However many people are still caught out by the usual phishing method which are fraudulent sites posing as the legitimate business.

Another criticism of the Which? Computing study was that some banks do not log clients out when users have moved on to browse other sites leaving accounts vulnerable if accessed on a shared computer . The banks criticised for this were Abbey, Alliance and Leicester, HSBC and Halifax.

Another worrying aspect of the study was the lack of security measures for transferring money . If a banking session was hijacked while using the Abbey, First Direct, Halifax and HSBC sites a criminal could enter any amount they wanted to.

Sarah Kidner, editor at Which? Computing said, "There are surprisingly big differences between big banks' visible online security systems. Some simple measures, like the use of drop-down menus, could improve safety considerably. "The banks may say it's the hidden security measures that count, but to have real confidence in an online account, customers need to see security in place."

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