Halifax has temporarily closed its online facilities after discovering an Internet scam.
Customers of some of the UK’s top retail banks have become the latest targets for online fraudsters. The scheme hits bank customers with fake direct marketing campaigns by email.
In the first phase of the scam, known as ‘phishing’, customers receive emails asking them to click on a website link and reveal security details. The second stage, known as the ‘job offer’ scam, convinces customers to act as agents for money transfers abroad in return for a second salary.
Halifax has been the latest target, but Barclays, Lloyds TSB and NatWest as well as large foreign retail banks have also been targeted in the recent past by the same scheme.
Halifax said that it will impose additional security measures and the bank’s online facilities would only reopen after this was completed. Customers will also be compensated for any losses and Halifax has urged customers to report any incidence of attempted fraud.
News of the scam coincides with telecoms regulator Oftel reporting that more than 50% of British households now have Internet access at home, with 750,000 joining up in the past three months. Cliff Stanford, who launched the UK’s first Internet provider Demon more than 10 years ago, commented that penetration had been much slower than expected but that household penetration could now gallop towards 90% within a year.
While such claims would suggest the potential for a swiftly growing online financial services market, this may not be the case. Mr Stanford’s household penetration predictions seem unrealistically high, as the future growth of new Internet users will increasingly be driven by a generational change, rather than through the exposure of large masses of the population to a new technology – as has been the case so far. Additionally, the ‘job offer’ scam shows the extent to which sophisticated forms of Internet usage for financial services remain limited in their potential by security qualms. Many online consumers will keep using the Internet for non-transactional purposes only.
Banks need to inscribe the needs and fears of their consumers into an integrated multi-channel strategy if this barrier is to be overcome. It is also essential to have a response strategy planned out to limit brand damage when fraud does occur.
