M86 Security which has offices in Britain and California says the money was remotely transferred from the accounts of individuals and businesses.

The Trojan virus works by first seeing how much money is held in the account, then steals it, showing the account holder fake balances, which allows it to cover its tracks. M86 says it discovered the scale of the theft, after it managed to penetrate the command and control server belonging to the criminals, which is based in Eastern Europe.

According to the company, the attacks appear to be continuing, and the financial institution involved and the police had been informed two weeks ago.

The new Trojan variant, dubbed Zeus v3 no longer simply collects users log in details and passwords, but now also transfers money out of accounts which have been compromised.

“This is an extremely sophisticated version of the virus and it cannot be detected by traditional security software,” said Bradley Anstis, vice-president of technical strategy at M86 Security.

The new Trojan is part of a new wave of viruses that infect machines, when their users visit legitimate sites, termed a “drive-by” infection.

The UK’s main high street banks say their customers are not believed to be victims of the attack, and when contacted by The Times, all said they would not comment.

They acknowledged, however, that online fraud was becoming ever more sophisticated and prevalent. A spokesman for HSBC said: “There are millions of viruses, and other malicious software. We urge people to take basic measures to protect themselves from virus attacks. Any customer who is the victim of fraud will be reimbursed by HSBC.”

The trojan even checks to see if the customer has sufficient funds. If their account holds more than ?800, the trojan gets to work.

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According the new data from The Australian Payments Clearing Association (APCA), cheque, credit and debit card fraud has increased from 7 cents for every $1000 worth of transactions to 9 cents for every thousand transactions, representing an increase of nearly 30 per cent.

The largest increase in fraud occurred in transactions where the credit card was not physically present which is over the internet. The amount of internet based credit card fraud rose from $65.5 million to $82.1 million during the year ending June.

Chris Hamilton chief executive of APCA says the rapid growth of the internet as a result of the National Broadband Network which will provide high speed internet access poses the greatest challenge.

“The National Broadband Network is going to lead to more of a problem unless we have this under control,” Mr Hamilton said.

Online credit card fraud is usually as a result of a person storing their credit card details on their computer in order to facilitate easier and quicker transactions on the web. The data was either then stolen by a hacker or the keystrokes of the user were recorded by a trojan or virus.

The payments industry has two main lines of defence against online credit card fraud. The first being lender tracking of customer spending habits, flagging any unusual payments, and internet only PIN’s.

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Almost everyone these days seems to do some part Christmas shopping online. Some do it for convenience, and others do it because if you look hard enough, there are some great bargains to be had.

If you do plan on doing some part of your Christmas shopping online, you should strive to stay safe, and knowing the retailers that you buy from are legitimate is critical, otherwise you may end up with nothing, or worse still find that fraudsters have stolen your credit card details.

Here’s how to stay safe online this Christmas.

Is The Site Trustable?

One of the best ways to find the best deal online is to use online comparison tools, like money-au.com.au, except obviously for the types of things you are looking to buy.

Some of these tools however may direct you to the best deal from a retailer you have never heard of. So how do you work out whether the site you are buying from is legit?

The best way is to use a directory like shopsafe.com.au. or other such directories. Directories like Shopsafe gives the site a once over before listing them in their directory, testing prices, delivery and site security.

If the site you want to buy from is not listed does not necessarily mean that it is dodgy, it means that the onus is on you to investigate. You should check whether the site lists an Australian phone number and contact address, and you should perhaps call the number first to check whether someone real actually answers.

Security

If you are looking for signs that a retail website is safe to shop at, the site should display the padlock symbol in your browser and instead of the site beginning with http, it should read https.

You should also make sure your cards are registered either with Verified by Visa or MasterCard SecureCode. If you have not already done so, you will find that it is easy and quick to do and offers an extra layer of security.

If you hold a Visa card or MasterCard you can sign up to either of those two services at your card issuers website or when you shop online with a merchant who participates in the scheme. The service means that when you shop online using your card, you will be required to enter a password first for your payment to be approved.

Just as important as making sure your cards are safe, it is critical to keep your PC safe. You should make sure your PC has anti-virus software. If there are multiple users of your computer, or you use a computer from an internet café, you should log off after every online shopping session. You should also maintain a note of the confirmation number of your order, even better would be to print a copy of the confirmation.

If you are purchasing presents that cost over $100 you should pay by credit card because it means you have extra protection from the Australian government, in the event the retailer goes bust.

Delivery and returns

There are a couple of things you need to make sure of when it comes to the delivery of your Christmas shopping.

The most important obviously is when the items you have ordered with actually be delivered. It won’t go down well with your kids, if on Christmas day you are making vague promises of presents that did not arrive on time.

The other thing you need to know is whether there is any extra charge for delivery, and you should also take the delivery charge into account when comparing the cost of items. Some sites charge fees for delivery, whilst others offer free delivery.

You should also make sure you understand and are comfortable with the refund policy of the merchant you intend to buy your gifts from.

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Speaking at a cards and payments conference in Sydney on Tuesday, assistant RBA Governor Dr. Phillip Lowe said “Almost half the fraud on credit cards occurs in situations where the merchant does not physically see the card. If this trend were to continue, it could undermine consumer confidence in transacting online which would have obvious costs.”

Dr. Lowe said that fraud on the internet had increased by a staggering 50 per cent in the last year alone, and suggested that the security of online payments system needed to be improved, despite the efforts of the card majors Visa and MasterCard.

Reserve Bank officials yesterday visited the Australian headquarters of Visa International to inspect progress of the card scheme’s new program to reduce credit card fraud.

For its part, Visa has embarked on an ambitious anti fraud drive after December data released by the RBA showed that online fraud using Australian credit cards had seen an explosion, and had increased by 61 per cent.

The steep rise triggered alarm bells within the card companies which are now aiming to slash fraud activity by 75 per cent over the next five years. Over the next 24 months internet shoppers will be asked to cite an online PIN number before credit card transactions can be completed.

Visa’s Andrew Woodward said his company had a cordial relationship with the RBA.”They’re very happy and very congratulatory about our security initiatives,” he said.

Credit Card companies face increasing pressure to deal with the issue of online payments security. Consumers could potentially opt instead of credit cards for online debiting of bank accounts when making payments, which has been the new trend in e-commerce.

Dr Lowe indicated that the RBA would continue to push the banks to enable consumers to pay merchants from their deposit accounts using internet banking facilities.

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