COMPANIES AND CONSUMERS STILL UNDERESTIMATE THE DANGERS OF CYBER FRAUD

Last month,the Office for National Statistics (ONSeleased the results from its crime survey for England and Wales which highlighted the first increase in plastic card fraud since 2009, rising to 5.2% of plastic card owners becoming the victims of card fraud in the last year.

The results come as timely reminder to consumers and businesses that organised fraud rings are continuing to evolve and are devising new methods to steal funds, identities and much more. You only have to look at cyber-attacks like Go Zeus and Cryptolocker to see how impactful fraud has been this year and it isn’t likely to stop in 2015. In the US there has been a litany of well-known stores that have been targeted in incidents like this, though high-profile cases have been scarce here in the UK so far.

But although the ONS survey shows that overall fraud has risen by 8%[1], it cannot accurately determine how much of it was down to cybercrime. So is it really any wonder that companies and even consumers are still underestimating the impact a cyber-attack can have? Our latest Global Fraud Survey suggests not, as nearly a fifth of people in the UK lack confidence that their financial institution can protect them against fraud[2].This demonstrates that banks in particular need to increase their focus on cybercrime. We know of some banks that even today only employ a handful of people tasked with combating cybercrime, whereas in some fraud departments hundreds are devoted to this task.

That in mind, there are somesystems in placeby banksto try and combat these issues such as a variety of layered detection and challenge response techniques to identify any abnormal activity. Many banks are also nowincluding the use of one time passcodes. These are generated by security tokens, SMS messages or via a card authentication device for logging onto internet banking applications or when making payments to new payees. In addition to these methods, some banks are beginning to adopt more stealth-like technologies that find a secure link between the bank and the customer’s device. For example, by capturing the details of the device, language and operating system a customer is using, they can create a digital DNA fingerprint to initiate the payment form and check current activity.

As statistics from the ONS continue to highlight the increase in fraud, it’s a timely reminder to banks and governmentsslowly realising the importance of putting the right systems in place, alongside educating the wider public against risky behaviours and the simple steps that can be taken to stay safe when paying for things online.Hopefully, as more banks begin to see the importance of tackling cybercrime, all of these practiceswill help boost trust and, with the help of larger cybercrime teams, lower the overall numbers of fraud in the future.

Ultimately, combating fraud is a two way street. Banks must make sure they are doing everything possible to avoid criminals stealing money from their customers, while customers must take every precautionary step available to them to limit the level of risk as best they can. Let’s hope next time these statistics are revealed, card fraud will be on the decrease.

[1]ONS: Crime in England and Wales, Year Ending June 2014: http://www.ons.gov.uk/ons/rel/crime-stats/crime-statistics/period-ending-june-2014/stb-crime-stats–year-ending-june-2014.html

[2]ACI Worldwide: Global Consumers: Losing Confidence

in the Battle Against Fraud: http://www.aciworldwide.com/-/media/files/collateral/global-consumers-losing-confidence-in-the-battle-against-fraud-report.ashx (page 35)

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