Online banking fraud in the U.K. continues to be on the rise, and at a sharp rate, according to a new report from the Financial Fraud Action UK (FFA).
The report, released on March 27, shows that online banking fraud increased 48 percent since 2013 to $89 million in 2014. Despite the increase, the FFA indicates that the fraud problem remains a “relatively modest” issue, as 53 percent of U.K. adults use online banking (26.9 million).
The same report indicated that U.K. card fraud losses hit $712.2 million in 2014, which was a 6 percent increase from 2013. While fraud is on the rise from the year prior, the 2014 figures are still 21 percent lower than the $906.8 million seen in 2008. This was during the same time period that the number of card transactions increased from 10.5 billion in 2008 to 15.8 billion in 2014.
The FFA report also showed that fraud from purchases made remotely, which means online, by phone or mail order, increased 10 percent in 2014 to $492.74 million. The number of fraudulent incidents in that category also rose 7 percent in the year period. eCommerce fraud losses in the U.K. increased 14 percent to $323.14 million. The report indicated that eCommerce spending in the U.K. hit roughly $220 billion in 2014, and that for every $149 dollars spent, only $13.70 was fraudulent. Online banking fraud incidents hit 53,192.
So what was to blame for the online banking fraud increase? A malware increase and savvy hackers.
“A key driver behind increasing levels of fraud continues to be fraudsters tricking customers into revealing personal and financial information, normally over the telephone,” the FFA report said. “This typically involves the criminal pretending to be calling from a bank, police or another trusted organization and claiming there has been fraud on the customer’s account.”
The report also details fraud rate on contactless cards, which the report indicated was much smaller. Of the roughly $227,419 in fraud losses in 2014, that was from $3.45 billion in spending. That’s just above $1 of fraud for every $149 spent. The study did indicate that figure may grow as the technology is newer.