Paying by text to launch spring 2014

15 January 2013 Last updated at 11:58 ET

UK mobile users will be able to send and receive money by sharing only their phone number by spring 2014, the Payments Council has said.

Account owners will be asked by their banks if they want to opt-in to a database that will allow the sending of money by text message.

The scheme is being backed by eight major financial institutions.

Its launch will bring the UK up to speed with technology long in use in the developing world.

Many African nations use systems such as M-Pesa, typically seen as a secure way to transfer funds quickly between individuals and businesses.

A spokesman for the Payments Council told the BBC it had taken the UK longer to catch up due to the technical challenge of building and testing a new database to power the system.

Mobiles in the UK are already being used for a variety of online banking tasks, with services such as Barclay's PingIt simplifying sending money to and from accounts.

But this new set-up will be the first to not require users to set-up a separate account with a mobile wallet service.

Account holders who do not wish to have their details in the database will be able to refuse - only customers who opt-in will be signed up.

The scheme will be administered by the Faster Payments service - which processed more than 800 million online and phone banking transactions in 2012 - and the Link network, which processed 3.1 billion cash machine withdrawals last year.

Joined-up accounts

The system will mean people can send and receive money to others by sharing just their mobile number - rather than having to swap other details such as sort code or account number.

However, the Payments Council said a passcode or similar security measure would ensure the system could not be abused.

Also, banks will have the ability to remotely disable accounts suspected of misuse.

The Payments Council told the BBC that limits regarding how much money could be transferred with the service would be put in place, but that the amount had not yet been decided.

Research would be conducted to make sure the limit represented a blend of "convenience and security", the spokesman added.

The Payments Council said it was working on getting the remaining financial institutions who are not yet involved in the project on board.

The eight institutions already backing the service are:

• Barclays
• Cumberland Building Society
• Danske Bank
• HSBC
• Lloyds Banking Group
• Metro Bank
• Royal Bank of Scotland
• Santander

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Facebook unveils social search tools

15 January 2013 Last updated at 13:24 ET By Dave Lee Technology reporter, BBC News

Facebook has announced a major addition to its social network - a smart search engine it has called graph search.

The feature allows users to make "natural" searches of content shared by their friends.

Search terms could include phrases such as "friends who like Star Wars and Harry Potter".

Founder and chief executive Mark Zuckerberg insisted it was not a web search, and therefore not a direct challenge to Google.

However, it was integrating Microsoft's Bing search engine for situations when graph search itself could not find answers.

Mr Zuckerberg said he "did not expect" people to start flocking to Facebook to do web search.

"That isn't the intent," he said. "But in the event you can't find what you're looking for, it's really nice to have this."

Finding folks

Earlier speculation had suggested that the world's biggest social network was about to make a long-anticipated foray into Google's search territory.

"We're not indexing the web," explained Mr Zuckerberg at an event at Facebook's headquarters in California.

"We're indexing our map of the graph - the graph is really big and its constantly changing."

In Facebook's terms, the social graph is the name given to the collective pool of information shared between friends that are connected via the site.

It includes things such as photos, status updates, location data as well as the things they have "liked".

Until now, Facebook's search had been highly criticised for being limited and ineffective.

Continue reading the main story

It's going to help drive connections within the network between individuals and between companies and pages"

End Quote Mark Little Ovum

The company's revamped search was demonstrated to be significantly more powerful. In one demo, Facebook developer Tom Stocky showed a search for queries such as "friends of friends who are single in San Francisco".

The same technology could be used for recruitment, he suggested, using graph search to find people who fit criteria for certain jobs - as well as mutual connections.

Such queries are a key function of LinkedIn, the current dominant network for establishing professional connections.

"We look at Facebook as a big social database," said Mr Zuckerberg, adding that social search was Facebook's "third pillar" and stood beside the news feed and timeline as the foundational elements of the social network.

Perhaps mindful of privacy concerns highlighted by recent misfires on policies for its other services such as Instagram, Facebook stressed that it had put limits on the search system.

"On graph search, you can only see content that people have shared with you," developer Lars Rasmussen, who was previously the co-founder of Google Maps, told reporters.

Test case

Mark Little, principal analyst at research firm Ovum, said he was "underwhelmed" by the announcement.

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Rory Cellan-Jones tries out Facebook's new search engine

"I think probably people were looking for something a little bit more strategic," he said, adding that graph search might well be a bridge to a more comprehensive search offering in the future.

"On the plus side I think it's going to help drive connections within the network between individuals and between companies and pages," he said. "If you are increasing connections between friends and pages you are effectively increasing the reach of advertisers."

In his demonstration, Mr Stocky showed how graph search could help any attempt to go back over old content that a user may want removed. For instance, it could let someone use search queries - such as pictures taken at a certain location, such as a night club - and untag them en masse.

Mr Zuckerberg said that graph search would launch immediately as a beta test, and would roll out "very slowly". The tool will be usable from the blue banner that sits at the top of every Facebook page.

"We're going to put an encouragement on the home screen of everyone's account so that everyone has the chance to look through these tools.

"We're going to do this before graph search is fully rolled out."

He added that external developers would eventually have access to the data in graph search - but access wasn't available yet.

"There's a very long list of things that we didn't do for version one. We have years and years of work ahead of us."

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App charges cause anger for parents

16 January 2013 Last updated at 07:11 ET

Anger over huge phone bills caused by purchases made within mobile applications has grown.

Regulator PhonepayPlus has noted a 300% increase in complaints from consumers faced with an unexpectedly large phone bill.

Many apps can be downloaded for free, but users are then encouraged to buy extra items.

Other free apps contained malware that tricked users into running up bills, the regulator added.

Children's "naivety" on social media was also causing concern among parents, PhonepayPlus said.

The regulator said it was working with Facebook to make sure rogue offers and promotions were removed from the site as quickly as possible.

In most mobile app stores, it is free games that make their way to the top of the most downloaded charts, so many games makers have opted for the in-app sales business model.

Burning holes

Many titles, such as the massively popular Angry Birds, give players the chance to progress more quickly in the game by spending small amounts of money.

Continue reading the main story

There are several steps parents can take to protect against the "bill shock" caused by in-app purchases:

• Register the phone as a child's phone with your mobile network before you give it to them.
• Talk to your mobile network about the controls available, for example a pay-as-you-go account or blocking certain services, and make sure you are clear and happy about what is being offered - for example "unlimited texts" is highly unlikely to include premium rate texts.
• Teach your child to stop and think before they input their mobile number online or on a social media site - entering numbers online can give permission to charge that number and can compromise privacy.
• Know which apps your child is downloading and how much they cost, including the cost of upgrades in free apps.
• Contact your mobile network straight away if you get an unexpectedly high bill or if your child is accessing inappropriate services. If you are unsatisfied, contact PhonepayPlus on 0800 500 212 or at www.phonepayplus.org.uk.

Source: PhonepayPlus

PhonepayPlus said its figures suggested that two in three 11- to 16-year-olds had downloaded their own apps.

The regulator warned that parents could see bills of "hundreds or even thousands of pounds" as a result of these in-app purchases.

In one of the more extreme cases, it was reported that children had downloaded counterfeit versions of games from Google's Android app store.

These games were infected with malware which, whenever opened, billed £15 to the user's phone bill without their knowledge.

PhonepayPlus' chief executive Paul Whiteing said parents must be vigilant.

"Connected devices will define the age in which today's children live and we are determined to ensure that they can receive the benefits while being protected from the risks," he said.

"Smartphones in children's pockets can burn holes in parents' wallets, so we are working with partners across industry and other agencies to prevent this.

"This is a real challenge for parents and for us as a regulator, but this plan meets that challenge head on."

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US employee 'outsourced job to China'

16 January 2013 Last updated at 08:50 ET

A security check on a US company has reportedly revealed one of its staff was outsourcing his work to China.

The software developer, in his 40s, is thought to have spent his workdays surfing the web, watching cat videos on YouTube and browsing Reddit and eBay.

He reportedly paid just a fifth of his six-figure salary to a company based in Shenyang to do his job.

Operator Verizon says the scam came to light after the US firm asked it for an audit, suspecting a security breach.

According to Andrew Valentine, of Verizon, the infrastructure company requested the operator's risk team last year to investigate some anomalous activity on its virtual private network (VPN) logs.

"This organisation had been slowly moving toward a more telecommuting oriented workforce, and they had therefore started to allow their developers to work from home on certain days. In order to accomplish this, they'd set up a fairly standard VPN concentrator approximately two years prior to our receiving their call," he was quoted as saying on an internet security website.

The company had discovered the existence of an open and active VPN connection from Shenyang to the employee's workstation that went back months, Mr Valentine said.

And it had then called on Verizon to look into what it had suspected had been malware used to route confidential information from the company to China.

"Central to the investigation was the employee himself, the person whose credentials had been used to initiate and maintain a VPN connection from China," said Mr Valentine.

Further investigation of the employee's computer had revealed hundreds of PDF documents of invoices from the Shenyang contractor, he added.

The employee, an "inoffensive and quiet" but talented man versed in several programming languages, "spent less than one fifth of his six-figure salary for a Chinese firm to do his job for him", Mr Valentine said.

"Authentication was no problem. He physically FedExed his RSA [security] token to China so that the third-party contractor could log-in under his credentials during the workday. It would appear that he was working an average nine-to-five work day," he added.

"Evidence even suggested he had the same scam going across multiple companies in the area. All told, it looked like he earned several hundred thousand dollars a year, and only had to pay the Chinese consulting firm about $50,000 (£31,270) annually."

The employee no longer worked at the firm, Mr Valentine said.

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Blockbuster enters administration

16 January 2013 Last updated at 12:51 ET

DVD rental firm Blockbuster has become the latest UK High Street firm to go into administration after struggling against online competitors.

The chain has 528 stores and employs 4,190 staff.

Deloitte, the accountancy firm which will now take over running the firm, said Blockbuster UK would keep trading while it tries to find a buyer.

Music chain HMV and camera-seller Jessops both went into administration earlier this month.

"We are working closely with [Blockbuster UK's] suppliers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors," said Lee Manning, from Deloitte's Restructuring Services practice.

"The core of the business is still profitable and we will continue to trade as normal in both retail and rental whilst we seek a buyer for all or parts of the business as a going concern.

"During this time gift cards and credit acquired through Blockbuster's trade-in scheme will be honoured towards the purchase of goods."

Many people were unhappy with the administrators' decision not to accept HMV gift vouchers, some of which had been given as Christmas presents.

It is not yet known what will happen to HMV's branches and 4,350 staff. Unusually, all of Jessops' 187 branches closed within days of administrators being appointed.

In the run up to Christmas, electricals retailer Comet collapsed and shoe chain Stead and Simpson announced it was closing 90 stores.

The Local Data Company which monitors the number of empty shops, said the recent failures added up to the worst period for the High Street it has seen.

"The administration and potential closure of over 1,400 stores in less than a month far surpasses Woolworths' 807 in January 2009," said director Matthew Hopkinson.

"This has the potential to increase the national shop vacancy rate by nearly 5% to an all time high of over 19% if all the stores close and are not reoccupied.

"The big question is how many more retailers are struggling out there to the point of administration?" he said.

Store closures

Continue reading the main story

It is shocking that the [Blockbuster] board and executive management failed to make bold choices"

End Quote Prof Ajay Bhalla Cass Business School

The first Blockbuster store in the UK opened in south London in 1989, and the firm has sought to expand its services in recent years, including with a trade-in facility for pre-owned titles.

The firm launched an online DVD rental operation in 2002, and the company's website, blockbuster.co.uk, claims to send out more discs per customer than other online DVD rental services in the UK.

However, this online rental market became increasingly crowded with rival services, and now the popularity of streaming films over the internet is growing fast.

Blockbuster UK has closed more than 100 outlets in the past few years.

Blockbuster went bankrupt in the US in 2011, but was rescued by US pay-TV provider Dish Network in a $320m (£200m) deal, which saved hundreds of US stores from closing. The UK arm is also owned by Dish Network and run separately.

Before Blockbuster was bought by Dish Network, there were media reports of ambitious expansion plans, including selling electrical goods such as televisions, mobile phones, and iPods.

But business experts said Blockbuster's problems were all too similar to those hitting other retailers - failure to adapt quickly enough to a changing business environment and consumer habits.

'Altered landscape'

Professor Ajay Bhalla, of Cass Business School, said: "The company, like HMV, failed to transform its business model early enough. When it did, it found a fundamentally altered competitive landscape where the platform model had destroyed the traditional retail one.

"Firms like Blockbuster failed to face up to the enormity of the change and altered their business model on the fringes (eg selling second-hand products), rather than coming up with an innovative offering. It is shocking that the board and executive management failed to make bold choices."

Dr Steve Musson, a lecturer at the University of Reading and an expert in the economics of UK cities, added: "The retail businesses that we have seen going into administration since Christmas have a lot in common - they have large numbers of stores and have struggled to adapt to changing retail habits.

"Rents for retail businesses are usually payable quarterly, with many landlords most recently asking for payment at the end of December, which is why we often see retail failures coming in clusters."

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US plants hit by USB stick malware

16 January 2013 Last updated at 13:10 ET

Two power plants in the US were affected by malware attacks in 2012, a security authority has said.

In its latest quarterly newsletter, the US Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) said "common and sophisticated" attacks had taken place.

Malware had infected each plant's system after being inadvertently brought in on a USB stick, it said.

The ICS-CERT said it expected a rise in the number of similar attacks.

Malware can typically be used by cyber-attackers to gain remote access to systems, or to steal data.

In the newsletter, authorities said: "The malware was discovered when an employee asked company IT staff to inspect his USB drive after experiencing intermittent issues with the drive's operation.

"The employee routinely used this USB drive for backing up control systems configurations within the control environment."

And at a separate facility, more malware was found.

"A third-party technician used a USB-drive to upload software updates during a scheduled outage for equipment upgrades," the report said.

"Unknown to the technician, the USB-drive was infected with crimeware.

"The infection resulted in downtime for the impacted systems and delayed the plant restart by approximately three weeks."

Physical effects

The authority did not go into explicit details regarding the malware itself, but did stress that the use of removable media had to be reviewed and tightened.

"Such practices will mitigate many issues that could lead to extended system downtime," it said.

"Defence-in-depth strategies are also essential in planning control system networks and in providing protections to reduce the risk of impacts from cyber-events."

In recent years, power plants have been the target of increasingly destructive malware and viruses - a bridge between damage in a digital sense, such as data loss of theft, and actual physical infrastructure.

In 2010, the Stuxnet virus was said to have damaged critical parts of Iran's nuclear infrastructure.

Security firm Symantec research said it believed Stuxnet had been designed to hit motors controlling centrifuges and thus disrupt the creation of uranium fuel pellets.

A UN weapons inspector later said he believed the attack had set back Iran's nuclear programme.

No country has claimed responsibility for the attack, but a New York Times report last year, written by the author of a book on the attacks, pointed the finger at the US.

Journalist David E Sanger wrote that the US had acted with the co-operation of Israel.

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Facebook allows free calling on iPhone

17 January 2013 Last updated at 06:41 ET

Facebook has added a feature in its mobile phone app that allows free calling for US iPhone users.

Users can now make calls to each other via the Facebook Messenger app anywhere they have a wi-fi or a cellular-data connection.

The feature could be a boon for heavy talkers as they would avoid carrier call charges.

Facebook said it was working on adding the feature to its Messenger app for Android and BlackBerry users.

Within the app, all a person needs to do is open a conversation with a partner, tap the "i" icon in the upper right hand corner and select "Free Call".

The calls, however, can only be made to another user who has Messenger installed on their iPhone. Users can neither call a Facebook friend who is logged in through the website or call a landline.

The latest mobile-to-mobile development was independent of the free video-calling software Skype, which was already integrated into Facebook's website, a spokesman said. The Messenger app is limited to voice calling.

The official said Facebook was expected to roll out the feature in its Messenger app for other operating systems and expand it overseas.

On Tuesday, Facebook unveiled a smart search engine - called Graph Search - that allows users to make "natural" searches of content shared by their friends.

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'Nightclub bouncer' cyber-scam found

17 January 2013 Last updated at 07:21 ET

Cyber-criminals have invented a cunning new method of targeting victims by developing a system that behaves like a bouncer at an exclusive nightclub.

Security firm RSA revealed how attackers assigned targets with a unique ID, meaning the scam could be aimed at specific people.

If a person's ID was not on the list, their computer would not be affected.

RSA said the advanced threat posed a new "detection challenge" to the security industry.

In a blog post, RSA cybercrime specialist Limor Kessem wrote: "As we adapt and improve our detection systems, we are reminded that in the never-ending cat-and-mouse game, only the nimble will survive."

The so-called Bouncer Phishing Kit targets preset lists of email addresses. For each target, a unique ID is automatically generated, creating a unique web address for the user to click on.

If someone has an ID that does not match the list of intended targets, they will simply be presented with a 404 Error page, and will be unharmed.

Continue reading the main story

Phishing is a tactic used by cybercriminals to trick users into sharing personal data.

Typically, this is by pretending to be a legitimate website - such as as popular social network, or online banking. Assuming they are on the real site, users will enter their username and password, only for them then to be stolen.

Other phishing attacks can make use of emails designed to look like they come from a trustworthy source.

Internet users can take several common-sense steps to prevent being caught out, such as double-checking web addresses look legitimate, rather than a misspelling such as Facebok.com.

Using the latest version of your internet browser, as well as up-to-date security software, will give you extra help.

The UK Payment Council has set up a website with advice on how to stay protected from phishing scams.

If, however, a person is one of the unfortunate ones, the same page will instead spring into life as an "attack page" ready to steal user credentials.

Using this method means attackers can harvest data from certain groups of users, rather than having to sift through large amounts of data.

For example, the Bouncer Phishing Kit could be used to gather personal details on people in one particular country.

"It holds this [bouncer] moniker because much like many high-profile night-time hotspots - if your name is not on the list, you're staying out," Mr Kessem said.

"Traditional phishers like to cast as wide of a net as possible.

"But with this tactic the phisher is laser-focusing the campaign in an effort to collect only the most pertinent credentials for his purposes.

"Keeping out uninvited guests also means avoiding security companies and prompt take-downs of such attacks."

Phishing is a growing problem for internet users. According to RSA's data, attacks of this type were up 59% in 2012 compared with the previous year, and cost the global economy $1.5bn (£940m).

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Strong Christmas sales at Dixons

17 January 2013 Last updated at 08:57 ET Continue reading the main story

Dixons Retail, owner of Currys and PC World, has reported robust sales growth over the Christmas period.

Ignoring the effect of store openings and closures, sales in the 12 weeks to 5 January were up 7% from last year.

UK and Ireland sales rose 8%, despite the lure of fire-sale prices at Comet, the electrical retailer's main rival which collapsed just before Christmas.

Despite the results, markets initially fretted at thinner profit margins and problems at Dixons' French online unit.

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The company's share price dropped 3.4% at the start of London trading on Thursday, before recovering in late morning to trade up 3.5% by mid-afternoon.

This retailer's shares had dropped a cumulative 3.2% over the previous two days on fears of poor sales figures that proved unfounded.

Dixons conceded that its profit margins had been squeezed during the reporting period, but attributed this to a change in the mix of products that customers were buying - with low-margin tablet computers selling particularly well - rather than rising costs or price discounts.

Full-year profits would be £75m-£85m, the firm said.

Mixed fortunes

The retailer continues to face problems with its continental business.

Sales in southern Europe - including Italy and Greece - fell 8% but remained profitable, while in northern Europe they rose 11%, reflecting the mixed fortunes of the various eurozone economies.

Sales fell 25% at Dixons' troubled French online retailer Pixmania. Dixons bought out the remaining shares in Pixmania last year in an attempt to turn the business around, and has been forced to write off much of the value of its investment.

"The single-channel operation Pixmania was disappointing, but we are making good progress in our restructuring plans, which are designed to put the business on a better financial footing," said chief executive Sebastian James.

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eBay shares rise as sales jump

17 January 2013 Last updated at 10:08 ET

EBay's sales for the last three months of 2012 topped analysts' forecasts as the online marketplace saw strong trading over the Christmas period.

Sales rose 18% to $3.99bn (£2.5bn) in large part due to growth in the use of smartphones to trade on the site.

"Mobile continues to rewrite the commerce playbook," eBay chief executive John Donahoe said.

Profits fell 62% to $757m, but the comparable 2011 figure was inflated by proceeds from eBay's sale of Skype.

According to eBay's statement, the PayPal payment division generated the greatest growth. Fourth-quarter revenue from the payment service totalled $1.54bn, a 24% increase from the previous year.

The marketplaces division, where most of the shopping occurs on eBay, saw fourth-quarter revenue of $2.05bn, up 16% from the 2011 quarter.

EBay charges a fee for each item sold, and receives a fee for each payment processed by PayPal.

On Cyber Monday in November, traditionally seen as the start of holiday shopping season, sales transactions on eBay's mobile applications more than doubled from the year before. The volume of mobile payments via PayPal almost tripled.

EBay shares rose strongly in after-hours trading following the announcement on Wednesday, and opened 2.7% higher on Thursday.

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