The use of malicious code and phishing scams to extract confidential account details from consumers have cost British banks more than £4.5m over the last 12 months. This is a tiny fraction of the £402.4m lost through credit card fraud in 2003, but banks today stepped up efforts to help consumers protect themselves from online scams and threats with the launch of a new website banksafeonline.org.uk. The site, which updates previous "safe computing" tips from banks and police, aims to be a one-stop advice shop for consumers and small businesses.
Scam emails that form the basis of phishing attacks pose as 'security check' emails from well-known banks. These messages attempt to trick users into handing over their account details and passwords. The collected details are used to engineer fraudulent transfers. First seen in the UK approximately a year ago, phishing emails are becoming increasingly sophisticated, directing users to bogus websites which accurately reproduce the look and feel of legitimate sites.
However, since earlier this past summer banking industry organisation the Association for Payment Clearing Services (APACS) has noticed a reduction in growth of phishing and a greater use of malicious code (often including key logging and Trojan) components in fraudulent scams. Malicious code is commonly deposited on users' machine by taking advantage of a combination of unpatched vulnerabilities (IE exploits are a favourite) and social engineering tricks.
Much of this activity is orchestrated from Eastern Europe and linked to groups also suspected of controlling botnets, networks of compromised PCs used to distribute spam and initiate DDoS attacks. "Botnets are being used in increasingly devious ways," said Mick Randall, head of operations at Britain's National Hi-Tech Crime Unit. Randall estimated that "hundreds" of criminals are involved in the illicit trade in botnets.
Sandra Quinn of APACS said there have been 2000 UK victims of e-banking fraud through either phishing and Trojan attacks since last September. Compared to the 14m people who bank online, that 2000-victime rate is dwarfed by credit card losses, which have hit a third of people at one time or another and cost the industry more than £400m a year, she said.
In the UK, bank customers have not been held liable for money siphoned out of accounts as a result of phishing attacks, with banks taking the loss. The problem is far worse across the Atlantic. A survey out this week, commissioned by TRUSTe, put US phishing losses to date at $500m. "The UK has not been hit as hard," said Matthew Timms, of the electronic crime group at Lloyds TSB.
The increased use of Trojans has prompted banks like Lloyds TSB to introduce memorable info in addition to passwords. That's placed security at the "right level", according to Timms, who downplayed talk of any immediate need to introduce hardware token and two-factor authentication, a highly secure approach widely used by banks in Scandinavia and elsewhere.
"Current level of security is very good. Banking technology is secure that's why we're focusing on educating consumers," Timms said, adding that consumers might find the introduction of new login systems inconvenient.
Barclays in trialling a system where one-time passwords for banking can be generated using Chip and PIN cards but we came away with the impression that British banks see no immediate need to buy into the current wave of anti-phishing technology. That's not to say they're complacent - the situation is under review - but current risk assessments are do not justify a huge technology spend. ®
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