News Article Published:
Friday, 10 August 2007
Category:
Financial Services
The banking industry has been handed a grandiose bit of bad PR after it has come in for severe criticism from the House of Lords, which blamed its poor security measures for the rise of internet fraud.
In a report from the House of Lords' science and technology committee, chaired by Lord Broers, it was revealed that the UK's direct online banking industry lost £33.5 million to fraudsters last year, up from £12.2 million in 2004 and £23.2 million in 2005.
The committee revealed that credit card fraud had increased by 21 per cent at a cost of £183.2 million in 2005, with around £117.1 million of this lost through internet transactions.
Banks came under fire in the report for "extraordinary complacency" in protecting customers' details.
The report recommended that banks would only be able to promote themselves as responsible businesses by being made liable for losses as a result of online fraud and could adopt a kitemark-style approval system to back this up.
The report said: "The government have insisted in evidence to this inquiry that the responsibility for personal internet security ultimately rests with the individual. This is no longer realistic, and compounds the perception that the internet is a lawless Wild West.
"It is clear to us that many organisations with a stake in the internet could do more to promote personal internet security: the manufacturers of hardware and software; retailers; internet service providers; businesses, such as banks, that operate online; the police and the criminal justice system."
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