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HBOS is changing its Bank of Scotland internet banking website in response to a security company's claims that the site was vulnerable. But the bank says the supposed risk did not pose any dangers to customers.

Information security company heise Security issued a report a month ago warning that many banking sites were vulnerable to phishing attacks. It has just issued a new report saying that four out of the seven banks analysed in the first report were still vulnerable and had not changed their sites.

"The original demonstration tests for Cahoot, the Bank of Scotland, and First Direct all work at the time of writing exactly as they did a month ago, no action has been taken to tighten up procedures," said a heise statement.

HBOS told OUT-LAW yesterday that it would change its site but said it did not believe the heise report uncovered any new threat. "We have examined the background to this research and do not believe the issue identified constitutes any immediate risk to customers," said a spokesman. "However, we have taken steps to resolve the matter in the interests of maintaining the highest levels of security. Work on the Bank of Scotland site will be completed imminently."

Phishing attacks involve producing a website which appears to belong to a genuine brand, usually a bank. The site is promoted in spam emails that purport to come from the genuine bank. They encourage visits, typically to confirm security details. Some recipients will be customers of the bank and fall for the scam, visiting the phoney site and entering their log-in details, which a criminal can use to access an account fraudulently.

Heise's demonstration of the supposed vulnerabilities involved inserting a fake page into the online banking systems of the various banks using so-called frame spoofing attacks which exploit vulnerabilities that can exist in web pages that "frame" content within a page.

Since then heise said The National Westminster has taken some steps by removing frames. It said the Bank of Ireland has introduced script code which identifies spoofed frames and The Link has stopped using frames altogether.

"Of the six banks found to be vulnerable to frame spoofing only two have been able to implement proper protective measurements during the last month," said the heise statement. "Four are still vulnerable to phishing attacks."

A recent report by APACS, the UK payments association, found that the number of phishing attacks had risen by 800 per cent in the last year. It also said that its research had discovered that 3.8 per cent of online banking customers, or half a million people in the UK, said they would respond to an unsolicited email appearing to be from their bank asking for their details. The APACS research said the number of phishing attacks in the month of August was 1,484, up from 160 in August 2005.

"The internet has totally changed the way we shop and bank, and it’s very safe provided you remember two simple rules: use a secure PC and be wary of unsolicited emails," said Sandra Quinn, director of corporate communications at APACS. "This new research shows that some people still aren't doing all they should to protect themselves which, hand in hand with a large increase in phishing email attacks at the start of the year, leads us to expect an increase in online banking fraud losses in the first half of 2006."

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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