cyber fraud losses mount
Cyber fraud accounted for a £755m loss in UK 2015

Cyber fraud Financial losses across payment cards, remote banking and checks totaled £755m in 2015, and driven largely by identity theft, according to Financial Fraud Action UK

Payment card cyber fraud accounted for 75% of UK cyber fraud losses in 2015, most of which was remote purchase fraud using card details stolen though data hacks and malware, says FFA UK.

Financial fraud losses across payment cards, remote banking and checks totaled £755m in 2015, up 26% on 2014 and driven largely by identity theft, according to Financial Fraud Action UK (FFA UK). Cyber criminals are increasingly using malware and social engineering attacks to acquire personal, financial and card data that can be used to commit cyber fraud.

Payment card fraud accounted for 75% of the total losses, followed by remote banking fraud (22%) and check fraud (3%). Fraud losses on UK cards totaled £567.5m in 2015, a rise of 18% from the previous year. The largest proportion of card fraud losses was due to remote purchase fraud (70%), followed by lost and stolen cards (13%), counterfeit cards (8%) and card ID theft (7%). Remote purchase fraud, including e-commerce fraud, accounted for £398.2m in losses, up 20% from the previous year in value and up 17% in volume.

According to FFA UK’s latest annual report, much of the increase in remote purchase fraud is due to fraudsters using card details stolen though data hacks and malware. Counterfeit card fraud occurs when a fake card is created by a criminal using compromised details from the magnetic stripe of a genuine card. However, because of an increased roll-out of Chip and PIN technology around the world, counterfeit card fraud losses fell by 5% to £45.3m in 2015.

  • Card ID theft fraud occurs when a criminal uses a fraudulently obtained card or card details, along with stolen personal information, to open or take over a card account held in someone else’s name. This type of fraud is either due to third-party application fraud or account takeover fraud. Third-party application fraud occurs when a criminal uses stolen or fake documents to open an account in someone else’s name. Account takeover occurs when a criminal takes over another person’s genuine card account, first by gathering information about the intended victim, often through deception scams, then contacting the bank or card issuer and pretending to be the genuine cardholder.
  • Remote banking fraud losses are made up of losses in internet banking, telephone banking and mobile banking. Total remote banking losses increased by 72% to £168.6m in 2015, mainly due to scams in which a criminal dupes the victim into giving away their 11ersonal and security details, which the criminal uses to gain access to the victim’s bank account, the FFA UK report said. “Criminals are also increasingly targeting business and high-net-worth customers, resulting in a greater increase in the value of losses compared to the volume of cases,” the report said.
  • Internet banking fraud, which covers fraudulent payments taken from a customer’s bank account using the internet banking channel, rose by 64% to £133.5m in 2015.

For the first time, the FFA UK report also included data on fraud prevention and showed that although £755m was lost due to fraud in 2015, prevented fraud was more than double that figure – £1.76bn. A total of £843.6m of card fraud was stopped by banks and card companies, and £524.6m of attempted remote banking fraud was stopped by bank security systems.

More Here [computerweekly]

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