Online Fraud

Despite the repeated assurances by banks that their online banking systems are secure, it would seem that reality is proving these "assurances" to be less than sound.

The Press Association reports:

"British online banking customers have fallen victim to a sophisticated attack by cyber criminals who have stolen hundreds of pounds from their accounts, an internet security company has warned."

You have been warned!

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A Dose of The Clampis

The Times warns that there is a highly sophisticated Trojan virus, Clampi, on the loose that steals online banking log-in details from infected computers.

The Clampi virus is spreading rapidly across hundreds of thousands of computers in Britain and the US.

The virus captures log-in and password information wrt financial sites, and sends it to a server run by the cyber criminals. They can then tell the compromised computer to send money to accounts that they control, or they can buy goods with the stolen credit card details.

The virus has a list of more than 4,500 finance-related websites that it monitors, including British high street banks.

Security experts warned that it was one of the stealthiest and most pervasive threats to computers using the Microsoft Windows operating systems.

Monitor your accounts closely.

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Digital Britain

The government's oft repeated promises of creating a "digital Britain", fit for business in the 21st century, seem to have fallen a little flat if the findings of the report issued by Ofcom are anything to go by.

Over 50% of broadband users in Britain are receiving less than half the speed promised by their providers. At least half of users of services that offer "up to 8 Mbps" receive a typical speed of 3.9Mbps.

The further away a customer lives from the telephone exchange, or if they use the service between 8pm and 10pm, the slower the speed.

Copper wire, instead of cable broadband, also kills the speed of download.

Needless to say, being a British regulator, Ofcom couldn't quite bring itself to accuse the "service providers" of mis-selling their service.

The Advertising Standards Agency is also happy to play "sleepy old watchdog", and claims that marketing which gives an "up to" figure is not misleading.

Doubtless Britain will, one day, have a digital service fit for the 21st century. Unfortunately that day will probably dawn in the 22nd century. Much like the trains, the plans and money allocated to implement "modernisation/service improvement" plans will only ever produce a third rate service.

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Telephone Tax

The government outlined plans for a £6 annual per line telephone tax, to be levied from 2013 on everyone with a landline. The theory being that the £1BN revenues raised would be used to fund improvements in the internet infrastructure in the UK.

In practise, as we know from other taxes such as NI and car tax, the money raised would be added to the general pot that the government uses to fund its general expenditure.

In other words, it is an increase in ordinary taxation by the back door.

The government seems to have forgotten that it raised billions when it sold, at hyper inflated prices, bandwidth to the mobile operators for the 3G networks (which have failed dismally).

Where did that money go then?

Why can't that be used to fund the "digital revolution"?

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Egg Fined by FSA

Egg, the Internet bank, has been fined £721K by the FSA for serious failings in the way it sold payment protection insurance (PPI) to its credit card customers. The FSA has also ordered it to pay compensation, which could cost £10M.

The FSA found that Egg had instructed sales staff to use hard-sell techniques on those who proved reluctant buyers.

These included over-emphasising the benefits of the cover, or telling customers they could take it out for free for a limited period and then cancel. The Guardian notes that Egg, in some cases, applied the cover to a customer's credit card even when they had not agreed to buy it.

Is it any wonder people despise the banks?

PPI misselling ranks with the misselling of endowment mortgages and personal pensions as one of the major financial scandals of the last 20 years. The bottom line being that PPI is overpriced and in many cases when a claim is made useless, as the insurers do their best to wriggle out of their obligations.

The FSA said telephone sales by Egg staff of PPI failed in its standard tests in 40% of cases between January 2005 and December 2007. Egg sold more than 106,000 PPI policies at an average cost of £156 during that period.

Egg will now write to customers who bought the cover, offering them the chance to cancel their policy and get a full refund. The FSA said that if everyone claims a refund, the bank would face a charge of over £10M.

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Banks Speed Up - Sort Of

A rare piece of good news for bank customers whereby the banks, whose reputation has sunk to an all time low, have actually started to do something the benefits their long suffering customers.

A banking scheme for one-day cash transfers over the phone or on the internet has started.

This is designed to speed up the process of transfers, which previously took up to four days.

Can you guess what happened to the money being transferred during this four day period?

It earned the banks a very nice £30M in interest per annum.

How nice for them!

Under the new scheme customers will be able to make one-off payments, up to a maximum value of £10K, over the telephone or via the internet. These payments will leave their account and arrive at the destination account on the same day.

The 13 banks included in the scheme are: Abbey, Alliance and Leicester, Barclays, Citi, Clydesdale and Yorkshire Banks (National Australia Group), Co-operative Bank, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Northern Bank (Danske Bank), Northern Rock, and Royal Bank of Scotland Group (including NatWest and Ulster Bank).

I wonder what the catch is?

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RBS Invents a New Charge

Congratulations to the Royal Bank of Scotland (RBS) for being so creative when it comes to inventing new ways to make money out of their customers. Hot on the heels of the announcement by the OFT that they would be investigating unfair bank charges on overdrafts, RBS foisted a new charge on customers who don't inform it of a change of address in a timely manner.

RBS will impose a £12 penalty charge on customers who fail to notify it of a change of address, after two statements have been sent to the customer's old address.

Needless to say its customers are less than impressed. However RBS remains unrepentant.

Quote:

"It is in the interest of customers to ensure the contacts details we hold for them are correct. We give clear instruction on each monthly statement on how to contact us to update these details."

Richard Mason, head of credit cards at the price comparison analyst Moneysupermarket, said:

"I've never come across this kind of charge before. But the OFT has cut credit card lenders' profits and that has made other charges inevitable."

Michelle Slade, an analyst at the personal finance consultancy Moneyfacts, said that credit card companies were finding new ways to increase revenue.

In April seven credit card providers, including American Express, Morgan Stanley and MBNA, have raised their interest rates. Other lenders have introduced new fees payable by customers who rarely use their cards, or cut the number of days following a credit card transaction after which interest becomes payable on the spending.

There are also new classifications of what constitutes a cash withdrawal; eg spending on internet gambling accounts is now regarded as a cash withdrawal, and charged at higher rates.

As I noted yesterday, banks are not charities. Squeeze their profits in one direction, and they will find another way to make money. The customer is a cash cow, there to be milked dry.

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Hacking Threat To 5 Million PC's

Research, carried out by the government, indicates that around 5 million UK home computers are open to criminal attack.

"Internet Safety: The State of the Nation" has been published on the government's website www.getsafeonline.org.

The research shows that UK PC owners are making fundamental errors, that expose them to hacking and identity theft.

Tony Neate, managing director of Get Safe Online said:

"Protecting your home PC is a basic part of being safe and secure from the threat of criminal activity on the internet.

The fact that there are millions of households where the virtual backdoor is left wide open for criminals is a real concern – these people risk not only losing their own personal and financial information, but also put others at risk if criminals are able to access an innocent user's PC or internet connection. None of us would ever leave home without locking our doors and windows; by taking a few simple steps we can all ensure that our computers' doors and windows are automatically 'locked' every time they are switched on."

The research found that:

• 36% of the UK's 13.9 million home internet-connected PC users – 5 million machines – do not have any form of firewall stopping hackers from gaining access to their computers and using personal information.



• 46% do not have anti-spyware software.



• 35% of home PC users said they do not download updates from Microsoft or Apple to ensure that their machines have the latest security updates.



• Over 10% of the 9 million broadband users in the UK do not have a firewall on their home PCs.



• 21% households that use wireless broadband for their PCs say that they do not have password protection on their connections. This means that criminals could "take over" their internet connection and use it to send thousands of spam emails, posing as the legitimate user.



• 25% of home PC users do not have anti-spam programmes which would protect them from "phishing" attacks and other email frauds.



• Almost 1 million home PC users do not have anti-virus software on their machines.

Nick McGrath, Microsoft and Get Safe Online spokesperson, said:

"Governments and businesses are working tirelessly to counter online security threats but the reality is we're dealing with criminals who use ever more sophisticated methods to attack computers.

Regardless of security measures that have been pre-installed, entirely new and complex threats will continue to emerge.

Prevention is the best defence! For many people today, a PC is increasingly becoming a vital investment for the home and as long as some basic measures are taken from the moment of boot-up and throughout its life-time, it can remain that way."

You have been warned!

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