Customers using their credit or debit cards online have been advised that high
street banks are likely to become increasingly reluctant to help victims of
internet fraud as new rules added to the Banking Code signal less
willingness to cover losses.
The updated code, which covers the banks' treatment of customers, came into
effect last month and states that victims of online fraud must have
up-to-date antivirus and antispyware software installed, plus a personal
firewall, to claim redress from their banks. If you fail to have the correct
protection in place, the banks are increasingly likely to refuse any claim
for a refund.
The more hardline stance has been introduced as figures reveal that cases of
fraudsters trying to steal bank details using bogus e-mails has tripled over
the past year. Apacs, the UK payments authority, says that there were 10,235
reported cases of this type of fraud - known as phishing - in the first
three months of the year, against 3,394 in the first quarter of last year.
Experts are concerned that many internet users are putting themselves at huge
financial risk. Kevin Mountford, of Moneysupermarket.com, the comparison
website, says: “If people do not have adequate protection on their
computers, the consequences could be devastating. Consumers lost £22.6
million to online banking fraud last year and individuals could incur huge
losses if they are held responsible.”
Until now, banks and building societies have covered almost all losses caused
by internet fraud, even when adequate protection was not in place. Although
banks will look at internet losses case by case, Tim Pie, of HSBC, says:
“Customers do have a responsibility to take reasonable steps to protect
themselves against fraud. The Banking Code now gives guidance on what those
reasonable measures are.”
While some banks provide limited software or other devices to help to protect
customers online - Barclays, for example, provides free antivirus software -
individuals cannot rely on these measures alone. Jerome Law, of Trend Micro,
a security company, says that there are three essentials that online
shoppers must consider.
First, make sure that you have antivirus and antispyware software, a personal
firewall and protection against spam and phishing e-mails. Secondly, ensure
that the software is compatible with your operating system, such as Windows
XP. Thirdly, look at how you use your computer and work out whether you
require additional protection. For example, if your children use the
internet, you may want to impose parental controls on their access to the
web.
Once you have the correct software installed, update it regularly. Check the
websites of the software companies for updates to download. You also need to
update your applications and operating system on your computer to block new
threats. You can download these updates online. For Windows, go to
www.update.microsoft.com and follow the instructions. This site enables your
computer to download and install updates automatically as they become
available. For Office applications, such as Word and Excel, go to
www.office.microsoft.com.
The Banking Code does not mention any specific scams or viruses, but there are
several common activities to guard against. Phishing e-mails urge you to
click on a link that takes you to a fake website, which looks identical to
an official bank site. You are then asked to verify, or update, personal
security information. By doing so, you are giving your information to the
fraudster who has created the fake website. The fraudster then uses the
details to access your online bank account and take your money.
Sandra Quinn, of Apacs, says: “Phishing scams continue to grow in number and
are becoming ever more sophisticated. The advice is simple: always be
suspicious of unsolicited e-mails that claim to be from your bank. Remember
that your bank will never send e-mails asking you to disclose your PIN,
login details or complete passwords. If you receive an e-mail of this
nature, delete it.”
As well as fake banking websites, fraudsters clone popular internet shopping
sites to obtain customers' bank details. Internet users input financial
information on these cloned sites, believing that they are buying a product
from the real store. Some fake sites will even take you back to the real
site once you have entered your bank details. Neil Munroe, of Equifax, the
credit reference agency, says: “The sites can look incredibly realistic and
it is often difficult to tell that you are on a cloned site.”
To avoid such dodgy sites, look for a padlock symbol at the bottom right of
the browser window, and for the website address to begin with “https://”. Do
not be fooled by a padlock that appears on the web page itself - it must be
in the window frame of the browser. Mr Munroe says: “If you do not know the
precise address of a website, find it through a reliable search engine, such
as Google, rather than through unsolicited, or spam, e-mails.”
“Trojans” are a virus that can be installed on your computer without you
realising. There were 33,000 reported cases of banking-related Trojans in
February alone, according to Trend Micro. Mark Bowerman, of
BankSafeonline.org.uk, a UK banking initiative to promote better security,
says: “Trojans can install a keystroke logger, which captures keystrokes on
your keyboard, allowing fraudsters to see passwords and other confidential
information as you type.”
The minimum requirements
Online viruses and the software that protects your computer systems against
them are littered with jargon, but here are the key definitions of what you
need on your computer under the new Banking Code.
Firewall: a barrier between the public internet and your private
computer system. It stops hackers breaking into your computer system. It can
also stop some viruses, called worms, that spread from computer to computer
over the internet.
Antivirus software: protects your computer from viruses, which can lead
to identity theft, loss of data or a slow or unusable computer. Antivirus
software scans incoming e-mails for attached viruses, monitors files as they
are opened or created to make sure that they are not infected and performs
periodic scans of your computer.
Antispyware: blocks spy viruses that allow fraudsters to view what you
are doing online. Spy viruses scan your hard disk for private data, such as
credit card numbers; log the keys you type, to obtain passwords or credit
card numbers; and take screen shots of the websites that you visit, to
capture personal information from them. Spyware then uploads the details to
criminals over the internet. Spy viruses, known as Trojans, can be blocked
with antispyware software, yet Apacs says that one in three people fails to
install it.
Always buy software from reputable companies. If you download free software
from the internet, exercise caution and download it from trusted websites.
Case study
Andrew Omoshebi, a design engineer from North London, had £1,500 of fraudulent
transactions on his credit card recently.
The 43-year-old, left, uses his credit card only for online purchases and has
all the necessary antivirus, antispyware and firewall protection installed
on his computer. Even so, he was alarmed to discover three consecutive
transactions on his statement that were not his.
“I make lots of transactions online, from buying magazines and stuff for my
computers to paying my bills,” he says. “It seems that when I was using one
site fraudsters managed to clone my card and make payments in my name.”
Mr Omoshebi's credit card provider, Barclays, repaid the £1,500 in full and
issued him with a new card within a few weeks. “I took all reasonable steps
to protect myself online but even so I was relieved to have the money
refunded in full,” he says. “I am now even more careful about updating my
software and I check my credit record every six months with Equifax - you
can never be too cautious online.”
