By Duncan McLeod, Financial Mail, April 2007
First National Bank has been forced to take action after criminal syndicates defrauded its Internet banking customers of millions of rand in recent weeks
The Bank has implemented a new system, already used by some of its SA peers, that requires SMS authentication before customers can transfer money out of their bank accounts.
FNB CEO Michael Jordaan says the bank has shut down its old online banking website and migrated nearly 400 000 customers to a new, more secure platform that uses cellphones as a way of authenticating transactions. It has also reimbursed all of its clients who were defrauded.

The new website measures have put an immediate end to all "phishing", Jordaan says. Phishing is a "social engineering" trick used by fraudsters to cadge personal details from customers.

Criminals create false websites that look identical or nearly identical to the bank's site. They then distribute e-mails randomly, asking people to log on to the fake website in the hope of catching consumers unawares. Once they have the client's login details, they can steal their money.

"It is amazing how many people hand over their personal details [on phishing websites]," Jordaan says.

Successful phishing attacks on FNB have risen six fold in the past 12 months and FNB isn't the only bank that has been targeted by phishers. All the major banks have suffered similar scams in recent months.

Jordaan concedes it is difficult for the police to track down and arrest the criminals. Often the fraudsters are from other countries - the most recent phishing websites mimicking FNB's homepage appear to be based in Eastern Europe. "The moment you close a phishing website, another one opens somewhere else," Jordaan says.

Jordaan is confident the new security measures have put an end to the practice. When FNB clients log on now, a one-time password (OTP) is sent to their cellphones. The OTP has to be entered again before certain requests - such as adding a recipient or transferring money above a user-defined level - will be processed.

Nedbank has also seen an increase in attempted phishing and "brand abuse". And there has been a significant increase in malicious spyware in Internet cafes, says Maire Eltringham, head of virtual channels at Nedbank.

However, Eltringham says Nedbank is seen as a "less profitable target" because of the security measures it has in place, and has therefore experienced fewer attacks than its competitors. "Nedbank uses a number of brand protection services to monitor potential phishing attacks and as soon as these are detected we institute procedures to take down the offending sites," she says.

Absa and Standard Bank could not be reached for comment by the time the FM went to press.