Why Britain is now the epicenter of online banking fraud

A magnifying glass is held in front of a computer screen in this photo illustration taken in Berlin on May 21, 2013. – REUTERS / PAWEL KOPCZYNSKI / FILE PHOTO

LONDON – It was an email offering a discount on an electric toothbrush that sparked the string of events that ruined Anna’s life.

Within minutes of entering her card details, she received a call from her bank telling her that fraudulent transactions were in progress. The next day, Robert Clayton of the UK’s Financial Conduct Authority called to say they were prosecuting the criminals responsible but his savings were in jeopardy.

There was no toothbrush, however. No fraud department, no Robert Clayton. They were all part of a scam aimed at gradually siphoning off a lifetime’s savings from Anna, and within weeks the plot had succeeded, to the tune of around 200,000 pounds ($ 270,000).

“I am still in shock, the guilt and shame are impossible to convey,” said the 78-year-old widow from central England, who did not want her full name used in this story.

She is one of thousands who have seen their savings wiped out this year by an unprecedented wave of online banking fraud that has hit Britain, where you are more likely to be a victim of online fraud than any other. crime.

According to five of Britain’s biggest banks and more than a dozen security experts, the country has been the global epicenter of such attacks since the pandemic.

The country’s lightning-fast payment infrastructure, relatively light fraud-related crime policing, and its use of English, the world’s most widely used language, have also made it a global test bed. ideal for scams, added banks and specialists.

A UK record £ 754million ($ 1 billion) was stolen in the first six months of this year, up 30% from the same period in 2020, according to industry body data banking UK Finance, and up by more than 60% from 2017, when he started compiling the numbers.

This represents a per capita fraud rate about three times that seen in the United States in 2020, according to a Reuters calculation from UK Finance and the latest available data from the Federal Trade Commission.

“The most sophisticated fraud tends to start in the UK, then move two years later to the US, then around the world,” said Ayelet Biger-Levin, vice president of product strategy at US cybersecurity company BioCatch, which provides fraud technology to banks.

“In the past 12 months we have seen more fraudulent attacks than we have seen in any other year in history. Data breaches have also accelerated, so there is a lot more personal information that criminals can take advantage of. “

Unlike the simple email scams of the past claiming to be from oil princes or barons seeking your help to transfer their millions, the modern bank scam can be sophisticated, phased, and extremely convincing.

“We have seen cases where the scammer talked to someone for three or four years like someone else before scamming them with a large sum of money,” said Brian Dilley, group director for the prevention of economic crime in Britain’s largest. Lloyds bank.

The government’s National Economic Crime Center (NECC) agrees with the banking industry’s assessment that fraud poses a threat to UK security.

“It’s growing on an already huge scale,” said Chris Reed, head of fraud threats at NECC, who he said met at least monthly with heads of banks, technology executives and telecommunications companies to assess and respond to threats.

The UK Faster Payments network, which allows transfers between bank accounts to be settled instantly rather than within hours or days like in the US and other developed banking markets, means criminals can quickly embezzle funds.

“The faster payment system facilitated faster fraud,” said Richard Emery, a fraud expert who advises Anna and 63 other scam victims whose average loss is 102,000 pounds.

Pay.UK, which operates the network, said the system supports the UK economy, consumers and businesses. He added that criminals were getting better at exploiting digitization and that he was working with industry and the regulator to tackle fraud.

While security experts and seasoned bankers have said many fraudulent attacks can be traced overseas – including India and West Africa – Britain is also increasingly exporting attacks .

Crimes such as authorized push payments (APPs) – where people are tricked into authorizing payment by a criminal posing as their bank or other trusted business – are proliferating around the world after starting as a largely British phenomenon.

The country ranks second in the world behind the United States as a source of automated bot attacks, the fastest growing type of fraud attack in the world, according to data from LexisNexis Risk Solutions, a company financial crime analysis.

Bot attacks see criminals use a high volume of stolen credentials to invade a website, allowing them to create new accounts or access existing accounts.

“It’s common to say that the fraud threat is imported into the UK, and I don’t think that warrants the analysis,” said Reed of NECC. “There is a strong link in the UK with a lot of frauds, as our operational experience shows. “

British banks – which often foot the compensation bill when people get ripped off – are trying to respond.

HSBC, which operates in the Americas and Asia, hired more than 300 people in one year to support its anti-fraud operations in its home market and increased its annual spend by 40% to keep up with an “exponential” number of affected customers, the bank told Reuters.

“The UK is the hotbed of activity for fraudsters. Currently the UK accounts for around 80% of our global personal fraud losses, ”he said.

Lloyds said it has invested £ 100million in its defenses over the past two years, while rival NatWest has 10% of its workforce – or 6,000 people – dedicated to fighting financial crime. The TSB has hired an additional 100 employees to help victims of fraud over the past year.

But lenders are also pressuring the government to ensure that social media platforms, where they say some attacks come from, share the burden. British lawmakers last month told bosses of Facebook, Google, Amazon and eBay they needed to fight fraud more.

Reed of the NECC said another problem was that only 1% of police resources were spent on fighting fraud, despite accounting for more than a third of all crime in England and Wales.

“I will not hide the fact that the resources for the response are completely out of step with the scale and gravity of the threat. We have a mountain to climb.

This means that criminals are bold enough to target people like Anna, who has little hope of getting her savings back.

The scammers had told her to transfer her ‘at risk’ money to an account on a cryptocurrency platform they had emptied – while isolating her from her family by insisting on secrecy and guiding her through it. way of responding to skeptical bank officials.

“They knew the name of my financial advisor, they were quite convincing as FCA staff,” she said. “And they told me I couldn’t tell anyone about the investigation as it would hinder their efforts to catch the crooks.” – Reuters

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David A. Albanese