UK companies must work more closely together and educate their customers about the internet to stem forecast losses of $400m from identity theft-related online fraud, say experts.

The head of internet banking at Lloyds TSB, Matthew Timms, says banks are becoming increasingly concerned about the rise in scams such as 'phishing'.

'This is an industry-wide issue that's affecting everyone,' he told Computing.

'The scams that people fall for online often wouldn't work in real life - you wouldn't give your banking details to someone in the street wearing a Lloyds TSB T-shirt.'

Timms says education should be a key priority.

'We need to educate customers on how to use the internet. We're looking to do more around communicating with customers and we're working with Microsoft to educate users,' he said.

Last week, the National Hi-Tech Crime Unit (NHTCU) worked with Russian authorities to arrest three men responsible for extorting thousands of pounds from online bookmakers.

David Hood, a spokesman for William Hill, which was targeted during the Cheltenham Races, says industry co-operation helped reduce the extent of the threat.

'Co-operation between online competitors, BT and the NHTCU really helped prevent further attacks.' he said.

Detective superintendent Mick Deats, deputy head of the NHTCU, says education is key to preventing further attacks.

'We need to educate the public in looking after their systems and machines so organised criminals can't use them to commit crime,' he said.

'If you've got a computer you've got to look after it or someone else will look after it for you.'

Researcher Financial Insights says financial institutions will lose $400m (£217m) this year from fraud-related attacks on customers.

Additional reporting by Emma Nash and Daniel Thomas