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UK watchdog body backs phishing victims

Consumer group Which? urges banks to protect customers scammed online.

Major UK consumer protection organisation Which? has issued a call for a change to rules regarding compensation paid out by banks when their customers are robbed as a result of phishing scams.

At present, most incidents of phishing are covered by the bank involved, but this is a voluntary measure undertaken by banks without legal backing to enforce it. In the light of major increases in the amount of phishing activity seen in the last few years - Which? reports over 5,000 incidents in the UK in the first half of 2006, compared to 312 in the same period the previous year, and bank losses from phishing fraud are estimated at £22 million - rights groups such as Which? are worried by the lack of guarantees in place to protect victims of email scams, spoofed websites and data-stealing malware.

Which? has also criticised banks for sending emails to customers, adding to confusion over authenticity of communications. Banking representatives have responded by saying that was it unlikely that their rules would change, and also that defrauded customers should perhaps be held more responsible. One spokesperson is quoted by the BBC (here) comparing giving away one's login details to giving away one's house keys.

'This is a complex and difficult issue,' said John Hawes, Technical Consultant at Virus Bulletin. 'Too much financial protection may lead to less caution from users, which will in turn line the pockets of the scammers and increase the popularity of phishing scams, which are already approaching epidemic proportions. On the other hand, banks have a duty to ensure their communications and account access systems are as secure and verifiable as possible, and being forced to bear the costs of fraud may encourage them to invest in developing safer ways of banking.'

Details of the Which? call for changes to the UK's 'Banking Code', a voluntary arrangement upheld by most major UK banks, is here.

01 March 2007

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