Consumers are repeatedly warned to keep their bank security details secret. Yet these warnings have failed to stop a number of Barclays customers from falling foul of an Internet scam. Security breaches like this damage consumer faith in Internet banking services.
With 3.5 million customers banking online, Barclays has more Internet banking customers than any other bank in the UK. Any suggestion that the security of its Internet banking service has been breached is therefore likely to be big news.
In reality the security of Barclays' Internet banking service has not been breached but a small number of customers have fallen victim to a scam which encourages them to enter security details such as their PIN and password into an authentic looking, but entirely bogus, email. In theory these details can be used to withdraw funds from customers' accounts.
The scam, affecting just Barclays' customers, is the latest to involve a major bank. In August 2003 customers of Citibank in the US received an email asking them to disclose their social security number, a key piece of information necessary to gain access to an online account. The National Hi-tech Crime Unit in the UK claims that scams like those that hit Barclays and Citibank customers are on the increase. Only eight such scams were reported in 2002. So far, 40 have been reported in 2003.
Security breaches like the Barclays scam are actually very small scale. Relatively few customers have received an email and an even smaller number are likely to have supplied their security information. Alertness to the importance of keeping account information secret is now fairly widespread and the majority of consumers are aware that their bank is unlikely to request this information via such a medium.
Yet, the fact that some customers have fallen victim to this scam does little to convince wavering consumers to use Internet banking services. It also highlights that banks must continue to make their customers aware of the importance of keeping their security information secret. Banks must be more proactive in this area as a lack of public knowledge will only serve to increase consumer reluctance to go online with their bank.
Recommended research: Reuters Business Insight, "Online Banking In The United Kingdom" (RBFS0046