Internet banking use on the rise – additional risks for consumers

November 5, 2011 at 4:39 pm

Usage of internet banking in the UK is on the rise – a recent government report on internet access estimated that 55% of all adults in the UK now make use of internet banking and this rises to 72% in the 24-35 year-old age bracket (Office of National Statistics, 2011). However, switching to internet banking can expose consumers to a risk of fraud if basic security measures are not taken by both the banks and their customers. Internet Banking fraud is usually connected to computer viruses, scams or leaving details on shared computers. In the UK this led to losses of £16.9 million in the first half of 2011 which is down 32% from last year, largely thanks to increased consumer awareness (UK Cards Association, 2011).

Banks have also taken their own steps to help reduce internet banking fraud. For example, HSBC and Barclays now offer customers basic virus protection when they open an online banking account, to help guard against viruses that can send private banking details and passwords to criminals. As a standard, all banks also employ strong encryption to prevent interception of private information over the internet. An increasing number of banks now further enhance your online security by issuing customers with either a portable card reader or a secure code generator device. A team at Cambridge’s Computer Laboratory, however, recently published a paper (Optimised to Fail: Card Readers for Online Banking, 2011) that highlights a number of issues with the first generation of these devices. Firstly, if your personal card reader is lost or stolen, it may be possible for criminals to guess your PIN by looking at which keys have been worn down, so it is important to notify your bank immediately if your reader is missing. Secondly, the team report that there have been instances of criminals tampering with Chip and PIN readers to use with stolen bank cards in order to access online accounts. However, if you report your card as stolen promptly, these attacks can be mitigated and overall, the card readers do appear to be helping to limit the impact of online banking fraud.

Below are some simple additional tips you can follow to help protect yourself from fraud when accessing your online bank account:
  • Protect your computer using either your bank’s virus protection software or some other good virus protection software (such as AVG Free or ClamAV) and make sure that this anti-virus software is up to date.
  • Make sure that you can see the “secure” padlock symbol when logged in to your internet banking site. Most recent web browsers also have a way to indicate when your bank is using extra-strong security (for example, for HSBC, HSBC BANK PLC displays in green letters in the address bar).
  • Although all online banking sites have a built in time out feature, it is still sensible to try and log out after you have finished, especially if you are using a shared computer as this will prevent anyone from accessing your banking details after you are done.
  • If you are using a shared computer (especially when at an internet café), it is a good idea to “Clear Private Data” before logging off the internet. In Internet Explorer, this can be accessed by selecting the Tools menu from the main address bar and clicking on ‘Delete Browsing History’. Instructions on how to do this in Chrome, Safari and Firefox are available online.

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