Financial Services > e-banking > Banking news
Online banking security is failing, says report

Tue, 19 Oct 2010

Fraudsters are now able to copy online security systems created to protect the confidential bank details of millions of people, it has emerged.

According to the UK Cards Association, there are around 70 million cards enrolled in the online security systems Verified, which is provided by Visa, and SecureCode, provided by Mastercard . Many banks and retailers are pressuring their customers to join up to one of these systems as a way to gain further protection from fraudsters. However, it turns out that the systems are actually encouraging customers to key in confidential information onto pages that may not be real.

Online security experts from Cambridge University argue that this is a major failing in the online payment system, and that people could end up being liable for any losses. Steven Murdoch of Cambridge University commented "Criminals are impersonating Verified by Visa and Mastercard SecureCode websites and collecting confidential customer data for example their password, their ATM pin [or] their card number."

Although both Visa and Mastercard argue that this type of fraud is rare and that they monitor and remove bogus pages quickly, they still present a potential online banking failure and problems for customers. There are also concerns that changes to the terms and conditions of these systems will make the customer more liable for fraud even though the providers cannot effectively prevent it.

The UK Cards Association has stated that the Verified and SecureCode systems do reduce fraud in general, and recommend that banks should pay up in a dispute unless there is proof that customer had been careless.
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