The Financial Services Authority has expressed its concern about the rise in phishing scams to a Lords Parliamentary sub-committee, claiming that such incidences are on the rise.

A spokesman from FSA’s Crime Team told the Lords that such attacks have risen by a staggering 8,000% over the past two years.

Of course this statistic merely reflects a rise in ‘reported’ incidents, which does necessarily paint a precise picture of what’s going on.

There were 5,059 recorded phishing incidents in the first half of 2006, compared to just 312 for the same period a year earlier.

APACS Head of Security Colin Whittaker told peers that the increase in the volume of phishing attacks was due to banks’ success in combating the problem:

“The rate of growth in phishing is down to a number of factors not least that they have been able to industrialise the process by which the criminals are launching attacks.”

“It seems people are falling victim to phishing attacks less often which is one of the reasons there has been an increase in the volume of phishing emails.”

APACS estimate that £45.7 million will be lost to phishing scams in 2006, compared with £4.5 million in 2003/2004.

However, the true extent of online fraud may be much greater, as banks and other online financial institutions are often reluctant to reveal the true extent of online fraud, through a mixture of fear of discouraging the public from banking online, and a lack of confidence in the police’s ability to deal with such threats.

The FSA’s head of financial crime Philip Robinson told the committee that online banking organisations need to be more ‘open and transparent’ in order to maintain public confidence in the system.

Further Reading

OnlineFraud – Roundtable Briefing, November 2005