Organised crime targets finance firms

2004

Organised crime groups are attempting to place staff in financial services firms to commit fraud and steal customers' identities, the Financial Services Authority (FSA) has warned.

Firms need to vet the background and identity of their staff more carefully before confirming their appointment, the FSA said.

They also need to be aware that devices such as Personal Digital Assistants (PDAs), USB pens and Smart phones can be used to steal corporate information or act as sources of virus infection

The warnings come in a new report by the FSA that paints a mixed picture of how financial firms are managing their information security in the fight against fraud and other financial crime.

Whilst some major firms, particularly in the banking sector, have built their defences in response to targeting by hackers and fraudsters, other sectors and small and medium-sized firms are less well prepared.

Earlier this year, Police in London warned that gangs of organised criminals were infiltrating Britain's banking industry and blackmailing employees to obtain customer account details.

Detective Chief Superintendent Ken Farrow, who heads the economic crime unit at the City of London Police said that the problem was exacerbated by the use of unvetted temporary staff.

Firms could do more to address the potential risks rather than responding to attacks once they have occurred, the FSA said.

In particular, senior management needs to take on responsibility for information security which includes the need for firms' defences to be continuously reviewed and updated to keep on top of the increasingly sophisticated methods used by criminals.

"Hackers and fraudsters are refining and improving their techniques as we speak. In the fight against fraud, firms will have to run to stand still if they are to protect their assets and those of their customers," said Philip Robinson, financial crime sector leader at the FSA.

"Firms should follow a preventative approach rather than reacting to a situation once it has happened which can be costly and damaging to reputation," he added.

"Having been the target of criminals in recent times, via the internet and other technologies, the major banks tend to have strong defences in place.

"But there is no room for complacency and criminals will seek to exploit vulnerable points where they can find them, including in other sectors or smaller firms."

It has been calculated that crimes such as embezzlement, fraud and dishonesty cost British businesses more than £40billion last year, the equivalent of £110m a day or some four per cent of the UK's domestic product.

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