Online banking fraud is on the increase in Japan as more and more Japanese consumers carry out their banking online, according to local press reports. Well over 16 million online bank accounts have been opened in Japan to date, according to the Tokyo-based Center for Financial Industry information Systems. However, the convenience of the services and the ease with which money can be transferred appears to have led to a sharp increase in the number of illegal transactions being made, says the Yomiuri Shimbun newspaper. The paper cites one example of an operator of an internet retail business who lost a total of three million yen (around $26,000) in a single day, bankrupting him. The problem, however, appears to be one more for online banking customers rather than for the banks themselves, as a loophole in Japanese laws means that online transactions are exempt from the usual laws on fraud compensation.
Although banks are obliged to compensate customers for illegal withdrawals as a result of stolen debit cards, the same does not apply to online fraud.