/ Money

Are your bank’s fraud checks missing the mark?

bank security

Banks, building societies and other financial institutions have a duty to safeguard against fraud and money laundering. But we know that those safeguards don’t always work as scammers are still slipping through the net…

As part of their commitment to protect you against fraud, financial firms are required to verify your identity when you’re trying to open new accounts. They can also monitor the way you use their services, to identify any suspicious activity.

Fraud checks

Of course, with our latest research finding that one in 10 people in the UK had made a bank transfer, or knew someone that had made a payment, that later turned out to be to a fraudster, fraud checks are undoubtedly necessary.

It could be argued, however, that these checks are too loose – accounts can been opened in a matter of minutes and while banks do have to verify the customer’s ID, not all will ask to see official documentation. We also know that scammers are getting away with opening bank accounts to receive their ill-gotten gains.


In May’s Which? Money magazine, we reported that a number of First Direct customers had been in touch to complain that the bank’s checks had gone too far.

Several told us that when attempting to open a fixed-rate bond they were faced with a 30-minute phone interview. Some were even quizzed about their income, spending habits and assets held outside of the bank.

First Direct explained that over the past few years it has implemented new measures to better protect customers against financial crime. These include asking new and existing customers more questions than ever before to ensure it has ‘complete and accurate records’.

However, there are a number of ways banks can gather this information, including by using documents, data or information obtained from a reliable and independent source. There’s also some evidence to suggest that different financial institutions take different approaches to how they verify identities.

Over to you

So, is it really necessary to be asked about your assets, including classic cars, paintings and Isas held in another bank, before you can open a new account with a bank you’ve been with for years?

Tell us, what’s your experience of your bank’s fraud and anti-money-laundering checks when opening new accounts? What type of questions were you asked and were you asked to provide proof of ID? Did you find the questions intrusive, so much so that it put you off opening a new account? Or, given that accounts being opened fraudulently and bank transfer fraud is rife, are the extra checks a good thing?​


We cannot have it both ways – “intrusive” checks to one might well be seen by others as an appropriate way to ensure accounts are not opened for fraudulent purposes.

It would help if this Convo included information from the industry as to what they are doing to check for fraudulent accounts, and making appropriate checks when new accounts are opened.

AFAIR HSBC who own First Direct have been caught for doing simplistic checking on opening.

I fear what you see know with First Direct is a combination marketing exercise trawl and a fig-leaf checking system which no doubt gets reported back as a total due diligence figure for the Bank as a whole to the regulator.

Opening an associated savings account should not require the sort of detail required as per the article. That is simply fishing for marketing. The stupid part is that the dishonest will lie anyway and the honest will be seriously miffed by intrusive questions.

Having said that it may be First Direct had a period when it was not very fussy at all provided people had the annual salary required on original opening and it does have some embarrassing gaps in it’s records.

I burst out laughing when I read this, Are your bank’s fraud checks missing the mark? Aye, rather! Only thinking of the recent prosecution of Barclays and four of its former executives, the £1bn fraud perpetrated on business customers by the Reading branch of HBOS, or the vast mis-selling of Payment Protection Insurance.

But thinking of the actual subject at hand, I’m with Malcolm, we can’t have it both ways.

I have been a good customer of First Direct since they started and know why people have complained about them. Fine if you are a new customer but…

I used to keep a low limit on my credit card and temporarily up it if I had a large purchase to make. There was never a problem until one time I asked for the limit to be increased by a couple of thousand pounds for a month. My current account had the substantial contents of a recently matured savings account in at the time but I was still given the third degree and it felt very degrading and unnecessary. So now I have a high limit and First Direct have increased their liabilities.

We have just opened a new joint current account and again had to jump through hoops to open it. Why do they need to ask if we pay any tax abroad or have accounts in other countries? Why do they need our to know our income and outgoings when we have been good customers for so long?

While accepting that we can’t have it both ways, and that penetrating checks are, sadly, necessary these days, I am a bit worried about the personal intrusive checks that are carried out one-to-one by bank staff. I feel that interrogation by telephone is particularly unpleasant, especially if you have no expectation that the call is coming and it might catch you at an inconvenient time or disposition. I could well see that the questioning could have a prejudicial aspect, but there is also pressure on bank staff to sell the products so a contrary tendency to leniency could let a fraudster through the net. I think these conversations are best conducted in the branch across a table [not at the public counter] and be fully recorded.I would also expect the staff doing the checks to be properly trained in appropriate interview techniques.

I can’t see why there should not be a two-week détente on setting up a new account. Once people accept that there will be a pause while their application is processed it will become a standard feature of banking. Any deposit could still be held in a temporary interest-bearing account and then transferred into the new account when fully approved and activated. There could also be a case for greater control over the withdrawal period involving large deposits into new accounts to stop people banking the proceeds of crime and then quickly taking it out in cash or transferring it. A probation period might be a good idea.

Setting up additional accounts, savings and investments with the same bank should not involve extensive questioning or enquiries into other personal financial affairs as by definition the bank has the customer’s history within its own records. It does not apply in my case, but if it did I would not disclose information about other assets, investments, wealth or property to a junior bank clerk, only to Mr Mainwaring personally.

I don’t automatically distrust banks, but it is statistically likely that a number of staff have criminal tendencies.

However in one way the banks are taking confidentiality too far – try to transfer from one Santander account into another and would they confirm the recipient was the same name as I had at the same address as me… no as a different family .. I had a long speel read out about fraud .. really unhelpful. Bank transfers should be able to verify names and addresses across bank boundaries no sole reliance on account numbers.

An interesting update. Banks, MPs and even some police forces are failing fraud victims. https://www.which.co.uk/news/2017/12/banks-slammed-for-failing-to-tackle-online-fraud/

P Callaghan says:
28 January 2020

This is a really timely question to ask. I have been a Nat West customer for 40 years and am used to a unintrusive professional service. However over the last year my current account and credit card have become increasingly impossible to use for anything other than the most mundane of transactions due to “security” blocks. There seems to be no objective basis for these other than they do not fit a rigid pattern and they are conducted by a totally inflexible overseas call centre.Presumably the banks are trying to reduce their own risk profile. I have asked and there is no way round this other than to change banks. If anyone has good information about a more professional customer oriented banking service I would be very pleased to hear more.