Feeds

UK fraud strategy 'more worthy of Uzbekistan'

Cambridge don lets rip

Securing Web Applications Made Simple and Scalable

A UK government strategy for tackling internet fraud has been criticised by a senior banking security researcher.

The UK's first National Fraud Strategy, launched on Thursday, aims to crack down on fraud that costs Britain £14bn a year, by "strengthening the counter-fraud community’s response to their activities and providing real help, protection and support to individual consumers and businesses". The three-year strategy has four key aims:

  • Improving the building and sharing of knowledge about fraud, through establishing a new National Fraud Reporting Centre and National Fraud Intelligence Bureau, under the City of London Police
  • Tackling the most serious fraud threats, such as identify theft
  • Disrupting and punishing more fraudsters while improving support to their victims
  • Improving the nation’s long-term capability to prevent fraud

Ross Anderson, professor in security engineering at the University of Cambridge, said that the proposal to allow the new National Fraud Reporting Centre to sit alongside the banking industry funded Dedicated Cheque and Plastic Crime Unit within the City of London police is an arrangement "more worthy of Uzbekistan than of Britain".

Anderson, one of the world's foremost experts on banking security, writes: "You have to ask how eager the City force will be to investigate offences that bankers don’t want investigated, such as the growing number of insider frauds and chip card cloning? And how vigorously will City cops investigate their paymasters for the fraud of claiming that their systems are secure, when they’re not, in order to avoid paying compensation to defrauded account holders?

"The purpose of the old system was to keep the fraud figures artificially low while enabling the banks to control such investigations as did take place. And what precisely has changed?

"The lessons of the credit crunch just don’t seem to have sunk in yet. The Government just can’t kick the habit of kowtowing to bankers."

The Cambridge don adds that the creation of the new National Fraud Reporting Centre, to be run by the City of London Police, is "presumably intended to defuse the Lords’ criticisms of the current system whereby fraud must be reported to the banks, not to the police". Cambridge security researchers, led by Anderson, have consistently argued that the business model for banks consistently transfers liability for fraud on customers, through unfair terms and conditions and "false claims about system security".

"This is a regulatory failure: the FSA has been just as gullible in accepting the banking industry’s security models as they were about accepting its credit-risk models," he writes.

Anderson is well known in the UK for testifying in cases about "phantom withdrawals" from bank accounts, arguing against the frequent insistence of banks that its systems are foolproof and that any contested withdrawals must therefore be the fault of customers. His thoughts on the UK's new strategy for tackling cybercrime can be found here. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Don't look, Snowden: Security biz chases Tails with zero-day flaws alert
Exodus vows not to sell secrets of whistleblower's favorite OS
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.