Are your bank’s fraud checks missing the mark?

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.

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.