THOUSANDS of consumers who have upgraded to wireless broadband, which lets you access the web anywhere in the home, are leaving themselves vulnerable to fraud.

About 5m households now have wireless - or “wi-fi” - internet access. However, about half, mostly those who have bought their wireless equipment from stand-alone firms such as Netgear, have not protected their connection. Uswitch, a comparison service, warns that anyone with an unsecured connection is open to fraud.

Neighbours could log in and piggy-back on your internet access, while hackers could access files and spy on the websites you have used.

They could work out when you are away on holiday if you have booked online, for example, and also see which internet bank you use. Then, with the right software, they could hack in to uncover your account details and potentially steal cash.

Unsecured wi-fi makes this much easier: if your computer had a secure connection, fraudsters would not be able to see which websites you had visited.

Jason Lloyd at Moneysuper-market said: “The security of wireless routers in the home is a serious issue that most people overlook. A hacker with the right software and knowhow could easily access files and records and potentially uncover passwords to online bank accounts.”

It is alarmingly straightforward for fraudsters to identify homes with unprotected wireless connections. They no longer have to trawl streets at random with their equipment to find vulnerable homes; they can now purchase software that can identify such households remotely.

However, it is not difficult to protect your internet connection. Most broadband providers, including Orange, BT, AOL and Sky, issue wireless modems that are already secured or “locked”.

The problem comes when you buy a wireless router from a manufacturer such as Netgear, Link-sys or D-Link through retailers such as PC World or Currys, because you have to secure it manually, and you can easily miss out this step in the process.

The easy option is to go for the modem from your broadband provider, although they are not free with all broadband deals. Orange offers a free wireless router, its Livebox, but only to those on its £19.99 a month package. Its cheaper £14.99 a month plan has no wireless router.

Talk Talk customers must pay £49.99 for a wireless router. Some providers, such as Virgin Media, formerly NTL and Tele-west, don’t offer them at all.

Stand-alone wi-fi routers cost from about £30.

If you regularly chase the best broadband deals, Steve Weller at Uswitch said getting a modem from your provider may not be the best option. Companies often only loan you the equipment, so it is configured to work with just one provider.

If you buy a stand-alone router, on the other hand, it can be used with most providers — the only restriction is that you need a different type if you have cable rather than a BT line.

Even if you have a secure connection, however, you are not necessarily safe. Last week experts in America warned of a new threat to wi-fi - dubbed drive-by pharming - which affects people whose connections are secure, but who have not changed their default router password.

Pharming is similar to phishing - where criminals send you an e-mail, often purporting to be from your bank, asking you to click on a web link and confirm certain security details.

Rather than taking you to the genuine website, the link directs you to a bogus one. If you then provide your account details, the criminal has all he or she needs to plunder your account.

With drive-by pharming, criminals set up a malicious code on a website, which is released when you visit the site and is sent to your router.

This changes the settings on your router so that when you next connect to the internet and visit certain websites, such as your bank’s, you are redirected to a fake one and the criminal is able to obtain your account and log-in details.

Fraudsters can do this because they know the default passwords used by the main router manufacturers, and few people change them.

Symantec Security Response, which carried out the research, said it did not think anyone had lost money in this way - yet.

YOUR QUESTIONS ANSWERED

How do I know if my wireless connection is secure?
Most of the big broadband providers, including Orange, BT, AOL and Sky, issue wireless modems that are already secured or ‘locked’ with some of their deals. They come with wireless encryption protocol (Wep) or wi-fi protected access (WPA) codes. When you link your computer to the router, you will need to input the Wep or WPA code to access your broadband. This has to be done just once, but for every computer in your house, and ensures your wi-fi connection can only be used with those machines.

What if I didn’t get my router from my provider?
Many people buy stand-alone routers because they are cheaper and make it easier to switch deals. And some broadband firms do not even offer them. You have to secure these routers manually. The set-up wizard will provide prompts, but these can be bypassed. Make sure you do not ignore them, and input your Wep or WPA code.

If I have a secure connection, am I safe?
No, even if you have input your Wep or WPA, you could still fall victim to the new threat of ‘pharming’. This is where criminals change your router settings so that when you connect to the internet and visit certain sites, such as your bank, you will be redirected to a fake site.

Fraudsters can do this because they know the default passwords, and few people change them. Your user guide should tell you how to connect to your router settings - usually done by typing a number into your web browser. Once connected you should go to the admin page where you will be able to change your password. This will prevent hackers from being able to access your router.