U.K. Banks Allowing Online-Crime ‘Black Hole,’ Panel Says

U.K. banks and other financial institutions should be forced to report all online crime, such as card cloning, to law-enforcement agencies to tackle a “black hole” of low-level fraud, a panel of lawmakers said.

Parliament’s cross-party Home Affairs Committee said in a report published in London today that criminals who defraud victims of a small amount of money are often not reported to or investigated by police, while banks simply reimburse victims. That means criminals who commit a high volume of low-level fraud can still make huge profits, the panel said. Banks should be required to report all fraud and log details of where attacks come from, it urged.

“You can steal more on the Internet than you can by robbing a bank, and online criminals in 25 countries have chosen the U.K. as their No. 1 target,” the committee chairman, opposition Labour Party lawmaker Keith Vaz, said in an e-mailed statement today. “Astonishingly, some are operating from European Union countries. If we don’t have a 21st-century response to this 21st-century crime, we will be letting those involved in these gangs off the hook.”

So-called e-fraud cost U.K. business 21 billion pounds ($32 billion) in 2011, the latest year for which figures are available, the panel reported.

The lawmakers also called for a dedicated “espionage response team” so that British companies, media and institutions can immediately contact it to report an attack. They recommended that Director of Public Prosecutions Keir Starmer should review sentencing guidance to ensure e-criminals receive the same sentences as if they had stolen the same amount of money or data offline.

``Crime is at record low levels and this government is taking action to tackle the cyber threat, investing more than 850 million pounds through the national cyber-security program to develop and maintain cutting-edge capabilities,'' the Home Office said in an e-mailed statement.

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