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Are banks doing enough to stop scammers?


At today’s British Bankers’ Association’s annual conference, Which? will outline why banks should be doing more to protect their customers from bank transfer scams. While much has changed since the days of the financial crash, there’s still work to be done…

The crisis that started in the US subprime mortgage market 10 years ago rocked the international banking industry and led to a breakdown in faith in the system across the board.

Consumer trust in financial services had already been damaged by the PPI mis-selling scandal, low levels of competition and poor customer service.

With bankers ranking even lower in the public’s mind than estate agents and politicians, many thought the sector would never recover.

What’s changed?

A decade on, and a lot has changed.

In 2010, I established the Future of Banking Commission, chaired by David Davis MP, to investigate the banking crisis, and with many of our recommendations now adopted, trust in the industry has risen.

We’ve seen a new and more powerful regulator in the Financial Conduct Authority (FCA), which has made a real difference to the way consumer banking issues are addressed. Moves to tackle banking culture have started to pay off. And emerging app-based banks, such as Starling, Monzo and Atom, are joining TSB and Metro Bank in challenging the status quo.

Online banking

We should recognise that progress has been made. But this is no time for bankers to rest on their laurels.

The last decade has not only been about attempts to fix the mess of the financial crisis. We’ve also witnessed a huge shift in consumer behaviour as the majority of us moved to banking online. This has brought enormous benefits as people can easily make transactions and better understand their spending patterns.

But it also carries risks. One of the biggest is that scammers can quickly con victims into transferring their hard-earned cash out of their bank account. Once the money has gone, the victims soon find there is little chance of getting it back from the banks involved.

Bank transfer scams

Since we made a super-complaint about bank transfer scams to the Payment Systems Regulator (PSR) last September, we’ve heard hundreds of stories of how people have lost life-changing amounts of money this way. Collectively, they were scammed out of £5.5m.

Take the couple defrauded out of £47,000 when putting a deposit down to buy a house. They received what appeared to be a genuine email from their solicitor with instructions on how to pay.

The fraudster opened an account with a prominent high street bank and used it to steal this couple’s cash.

Despite the fact that almost £50,000 was being transferred to an account the couple had never paid into before, the bank raised no questions about the transaction. Within a few hours, the fraudster cleared the account – again, no questions asked.

Banks’ customers have been losing large amounts of money to these types of scams for some time now. And as more of us bank online and scammers become ever more sophisticated, this could grow and grow.

Taking measures

Last month, we wrote to the banks to ask them what preventative measures they’ve put in place following our super-complaint.

Although they’ve started to use more explicit warning messages and have attempted to raise awareness and educate their customers, they seem to be suggesting that the solution is that customers should be ever more vigilant and spot scam themselves. Even in situations where they know people are vulnerable.

If this is to be the limit of the industry’s response, then it suggests they haven’t fully learnt the lessons of the financial crisis. Surely if that taught us anything, it was that banks need to be on the front foot, championing consumer interests and addressing their customers’ issues rather than waiting for regulators or governments to force change.

At today’s British Bankers’ Association conference, we hope to hear first-hand from the industry about how they will step up and be assured that more is planned to address these awful scams.

We all need to be reassured that the industry has truly changed.

Do you think banks are doing enough for their customers? What more could banks do to protect consumers from scams?

This is an edited version of Peter’s original article for The Telegraph, published online on Thursday 29 June 2017.

Reginald Parker says:
29 June 2017

Historically and in my experience, the Boiler Room Scam was identified over 10 years ago, and the then Chancellor of the Exchequer chose to ignore alerts and evidence placed before him. Subsequent Chancellors have been able to prevent it’s disclosure to the general public, so that it was only made public recently and in one case only. Millions of pounds were involved. No other prosecutions have been brought. Can the public be certain that scam is not to be prevented? Banks and the Stock Exchange had been aware as long as the Chancellor. Are they acting positively on this and other major scams, or are they still allowed to be complacent?

bishbut says:
30 June 2017

Unless some MP is personally scammed and loses a lot of money they will be in no hurry to do anything
Again some People will always fall for the simplest and most well known scam whatever any one does
Banks and others must do more though



My original response here has been removed and this article rewritten to remove this:

“Surely if the events of 2007 and 2008 taught us anything, it was that banks needed to be on the front foot, addressing their customers’ concerns rather than waiting for regulators or governments to force them to change.

I hope that the banks really have changed. I want to be confident that lessons have been learnt and that the banking industry wants to put its customers first.” DT

I was fairly rude about this passage as it seems to indicate that despite the majority of the nation knowing that Banks are and always have been businesses that put profit first and will never do anything purely for consumers benefit this idea is not held by the CEO of the charity.


I very much agree, Patrick, that the banks and other sectors should act promptly to recognise the need for action before the regulators and government has to take action. There seems to be a view that it is not possible to run a business profitably if you take responsibility for the needs of customers, but I do not believe that this is the case.


The view you portray is not one I have seen expressed. Perhaps you could link to it?

Banks and other institutions may well take action when problems with systems appear.


Check your own posts, Malcolm. It’s evident that you see serving the needs of shareholders as first priority. A bit more effort on corporate social responsibility could mean less work for the regulators and less new legislation.


wavechange, you can check my post of 30th June that happens to follow your comment. This represents my consistent view on a number of Convos. 🙂


We have acknowledged that there is a duty to protect the vulnerable but the point that I have been making is that there are others who are not vulnerable but at risk of losing money or being charged more for energy because of their situation. I believe that it is the responsibility of businesses to take into account the personal circumstances of their customers.

If you have certain medical conditions you will be expected by the government to provide evidence that you are fit to continue to drive. Perhaps our banks should regularly review the fitness of their customers to continue to use services, or even fitness to use them in the first place.


It is occasionally said that we should be careful what information we give to businesses. How should they therefore be informed of our “personal circumstances” ?

I believe the vulnerable should be helped, but of course they need to be identified in the first instance. I’m not clear how this should be done, and how this information should be made available to the businesses they need to deal with. Maybe a Convo could discuss this?

It may be that some banking services should no be given to certain people, if they are in danger of having those services compromise them, or if they are not capable of using those services correctly or reliably. Services designed specifically for vulnerable, or less capable. people maybe should be offered.

Those over 70 simply declare their fitness to drive, unless they wish to continue driving certain classes of vehicle.


We have had extensive discussion about the vulnerable and benefits are available, but I would rather they were not exploited in the first place.

My view is that the privilege of using banking services should be earned, but the problem is removing existing privileges if the need arises. It’s certainly something that would be worth discussing.

Self-declaration is widely used as evidence of fitness to drive and do other things where there is an element of risk. Some of our charity volunteers have been trained to operated machinery and must self-certify that they are fit to continue, and I have to countersign their application to confirm that I support this.

I am certainly not suggesting that official information should be passed on to banks or other companies but it certainly helps business to be able to check the credit rating of customers.


There is a regular opinion from some contributors that businesses should all put customers first. Businesses are formed by investors risking their money hopefully making a return on their investment. So, to survive, businesses must make profits. However, at the same time businesses must sell their product, and that requires customers. Therefore the consequences of the impact of their service on customers is a prime consideration as, without continuing custom, their business will fail. This applies to banks as well as others.

The frustration is that many customers accept service that some others consider unacceptable and, unprepared as they are to vote with their feet, change – if any – is at best sluggish. That is why we need a proactive consumers’ organisation to catalyse change – but only if it does so from a balanced and fair perspective. It needs, in my view, to work with the banking industry to see what is being done, to put proposals forward as to what could be done, and to keep separate customer stupidity from customer ignorance. Education should form as much a part of this as well as reform.

I am for cooperative and constructive progress, not partisan campaigning.


I don’t see voting with your feet as an adequate solution because you may have already spent hundreds or thousands of pounds on goods or services and been let down.

It’s not helpful to refer to customer stupidity.


Some customers do silly things with their finances – that it was I mean wavechange. You cannot protect some people from themselves.

By voting with your feet I mean, of course, if you unhappy with, in this case. your bank. unless you have an ongoing problem then move your business to another one. I can recommend mine, as have many others.

None of this meant that we should not seek to have services improved but we should hope to do it in a knowledgeable and cooperative way. Which? has a tendency to only present one side of the argument; I’d like to see them look at it in the round and work with the indu