Scam closes Net bank

One of Britain's biggest banks suspended its online banking services after its customers were targeted by internet fraudsters.

NatWest was hit by the "phishing" scam, where criminals encourage customers to send personal banking details by email.

The bank was forced to prevent one million online customers setting up new direct debits or standing orders.

NatWest could be followed by other banks after yesterday's scam. It said it had stopped online customers setting up accounts for servicing third parties to prevent money from being transferred out of the country.

"Nobody has lost any money as a result of our pre-emptive measures," a spokesman said.

In the scam, fraudsters demand that recipients of emails provide personal details, and then arrange for money to be moved out of the country.

NatWest said that customers who wanted to set up new payments could do so using methods such as telephone banking.

It added this was not the first time it had taken such action, and anyone who was defrauded would be reimbursed.

The bank said it had posted warnings over its internet banking site 18 months ago, when fraudsters started operating. The other main clearing banks said they had not felt it necessary to take such action despite similar attacks. So far banks have been willing to compensate customers.

The Financial Services Authority, the City watchdog, warned last week that banks would have to step up preventive measures against phishing.

Philip Robinson, head of the FSA's crime division, said: "Firms will have to run to stand still if they are to protect their assets and those of customers."