Online bank Egg has confirmed that three people have been arrested after its anti-fraud software detected their attempts to set up bogus online bank accounts.
Egg said the software enabled it to provide information to the National Crime Squad, leading to yesterday's arrests. An Egg spokeswoman said the arrests were in connection with "attempted fraud", which Egg said had led to a "minimal" amount of money being lost by the bank.
Egg denied reports that the bank had at anytime been at risk from a security breach. "We are extremely vigilant and our security remains un-breached. Our customers' money remains secure," the spokeswoman said.
She added: "Four or five months ago, the police came to us for help in tracking down people setting up fraudulent online bank accounts. We worked with the police to develop a piece of software and two months ago this was installed. It was this that led directly to the arrests made yesterday."
Gary Clifton Marshall, operations director at Egg, said the bank uses several pieces of software to detect possible fraud. "Some of it was developed in-house, but we also use some software called Hunter. We have invested heavily in security systems and getting the right people," he said.
"When a fraudster attempts to set up an account [they] may use information from the electoral roll, but they may not have all the details they need and will make them up. Our system can cross-check this data to make sure it is genuine. We can also detect whether multiple accounts are being set up from one IP address," he added.
"When a fraudulent account has been set up it will usually be used quite quickly and we have software that can detect any abnormal activity - so it is only a minimal loss at the start," he said.
Since setting up its online banking service last year, Egg has suffered a string of embarrassments.
Among other internet banks, Egg was criticised for placing the responsibility on the customer to prove that they have been the victim of fraud, rather than the common practice of automatically refunding the money once it exceeds a set amount, usually £50.
It also experienced a series of website crashes earlier this year, which left customers' personal information on the screen.
In addition, it sent out emails to one customer displaying credit card details in the subject line and text.
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