UK faces falling into cyber-crime 'black hole' if banks keep quiet on small scale fraud, warn MPs

Banks must be forced to report every case of fraud amid concerns of a “black hole” of unseen illegal activity where cyber-criminals act with impunity, MPs have warned.

Criminals defrauding people of small amounts of money are often not reported and banks reimburse victims without the crimes ever appearing on official statistics.

Concerns about the bank’s reputation and the lack of confidence in police to deal with the attacks are reasons cited for the failure to report low-level fraud, MPs say.

The report by the Commons Home Affairs Select Committee comes amid concerns that 800 specialist police officers will be lost because of budget cuts despite the growing problem of cyber-crime, which costs Britain an estimated £18bn to £27bn every year. The most senior policeman dealing with online fraud, Commissioner Adrian Leppard of the Metropolitan Police, warned that Britain was not winning the war on digital crime, the global cost of which now outstrips the money made from the trade in heroin, cocaine and marijuana.

“Criminals who commit a high volume of low-level fraud can still make huge profits,” says the MPs’ report. “Banks must be required to report all ecrime fraud to law enforcement and log details of where attacks come from.” It criticises the Government for failing to fund a new European cyber-crime centre, EC3, set up to share data on hacking.

The Home Office says it is investing more than £850m to fight ecrime. However, critics told the committee most of the budget went to intelligence agencies combating terrorism.