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How long should we wait for action on fraud?

Fraud

More than 18 months after the government established the Joint Fraud Taskforce to crack down on fraudsters, fraud in the UK is still on the rise. So what has this taskforce been up to?

The latest figures from the Office for National Statistics (ONS) reveal that one in six of all estimated crimes in England and Wales are linked to fraud that was committed online.

It’s clear that the only way we can tackle it is by working together.

Fraud taskforce

That’s why when in February 2016 the government announced it was committed to cracking down on the problem by establishing the Joint Fraud Taskforce, Which? welcomed the move.

Last year we called on the taskforce to examine whether companies are taking enough responsibility when their customers are defrauded, and set out recommendations before the end of the year on how companies can better protect them from fraud. In our view, it’s vital that there’s a coordinated approach across government, law enforcement and the financial industry to identify and combat the threats to consumers.

But more 18 months after this taskforce was created, what has it actually achieved?

Well, the answer is that it’s still not clear. We’re concerned about the lack of transparency both in terms of what the taskforce is working on, and importantly what progress it has made to date.

Fraud risk

When the taskforce was first established, the government set out a number of key aims including tackling ‘systematic vulnerabilities’ and ‘weak links’ in processes, which fraudsters can exploit. During this time we’ve highlighted various issues that the taskforce would be well placed to tackle.

Almost one in ten people now fall victim to online fraud and the methods used by scammers are increasingly sophisticated, making it more challenging for consumers to equip themselves with the necessary tools and information to protect them.

And it’s not just us that has noticed there has been very little noise coming from the taskforce. Earlier this year the National Audit Office (NAO) published its report into online fraud, which shared our concerns about this lack of transparency. It recommended that the government should publish information on the Joint Fraud Taskforce’s performance and future plans.

The Public Accounts Committee opened an inquiry yesterday into ’The Growing Threat of Online Fraud’, building on the work highlighted by the NAO in their report this summer.

Earlier this week, the Home Secretary appeared in front of the Home Affairs Select Committee where the Joint Fraud Taskforce and push payments were up for discussion. Whilst there was some indication that progress is being made, with work by Mastercard to crack down on fraudsters who try to use your card details to buy things, the Home Office revealed that the taskforce is still working on agreeing the measures that it will assess its own progress by.

The taskforce’s minutes, published earlier this week, also revealed that an idea for a fraud hotline was proposed at a meeting in September. According to news reports, this appears to be a developing idea with the details on how such a hotline would work not yet clear. Fraud victims are currently advised to contact Action Fraud.

Waiting for action

It’s now four months on from when the NAO published its recommendation and 18 months after we called on the taskforce to set out how companies can better protect customers from fraud. Since then we’ve heard numerous awful stories from people who have lost life-changing amounts of money through fraud, including bank transfer scams, but who have seen little swift action to help them.

It’s time that the government now set out an ambitious agenda to tackle fraud, publish an update on the progress of the Joint Fraud Taskforce and outline what action it will urgently take to safeguard us from scams.

Do you think the taskforce is doing enough? What would you like to see it doing to combat fraud?

Comments
Member

If the receiving banks for fraud were held liable and made to repay victims, the banks would soon clean up their acts, put effort into catching scammers and make banking safer.

As long as they can all avoid responsibility, nothing will change.

Member

Once the anonymity of the fraudsters is broken, we will have solved the problem. While they are able to hide, extract money and disappear, they have no fear of being caught. With a bit of ingenuity it’s easy pickings for them. A trawl of a few thousand will net a couple of results and if they are lucky someone’s life savings will go their way. Education and making banks more responsible for losses, will, as Alfa says, make banks more active in this field and make the fraudster’s job harder, but they need to be caught, and I wonder whether the taskforce is actually looking at this, while it secures the fire doors at home.

Member
John says:
21 October 2017

If Banks were obliged by law to immeidiaetly refund the money defrauded – Lidl are able to have a refund back in my account inside 20 minutes, so it is possible – and the onus is on them to prove that the victim was negligent, if necessary go through the Courts to recover the money from the victim,I think this would focus their minds quite effectively on seeking ways to prevent fraud.
If lawyers were obliged to take on the case of the victim at no charge to the victim and have to recover their costs from the fraudster I think the laws would soon make fraud virtually impossible!!

Member

People might then be less careful how they conduct their financial affairs if there was always automatic and immediate redress and free legal aid, whatever lack of care they took. We do have to cultivate a sense of responsibility in people and help them avoid scams. Equally, we have to tighten up the financial systems used to make scams as difficult as possible to perpetrate and to help customers avoid mistakes, particularly in money transfers. Work on the latter is underway.

Member

The problem is where you draw the line between stupidity and getting scammed even though you have taken all precautions.

Member

As Which? had (still has?) the ear of government should it not be taking a direct part in such task forces? Victim Support belongs: ( “As an independent charity, we work towards a world where people affected by crime or traumatic events get the support they need and the respect they deserve. We help people feel safer and find the strength to move beyond crime.“. ) Are they not doing their job? I cannot see other consumer groups represented.

Member

We’re concerned about the lack of transparency both in terms of what the taskforce is working on, and importantly what progress it has made to date.

I’m not sure how fair this is. The government website that relates to this is https://www.gov.uk/government/collections/joint-fraud-taskforce (this is the link “the government set out…… given in the intro).
I haven’t studied the documents in detail, but there are board minutes, members list, newsletters that seem to me to tell us what they are doing and what progress is being made. Whether this is sufficient is another matter.

Member
Patrick Taylor says:
20 October 2017

Useful piece of info malcolm_r.

The uncomfortable truth is that the cries for easy money access, easy transactions, easy credit easy everything, and banks looking for cheap fixes has created a monster system with flaws aplenty.

Additionally the systems customers use to interface are very hackable in their own right. Even more alarming is I suspect 80% of the population do not fully understand the underlying systems that they use.

Whether someone has taken the time to look at other countries and wonder how prevalent fraud is there as opposed to the UK would be interesting. My own opinion is there needs to be a root and branch overhaul with security of processes top in the agenda.

The very easy part of that is that Banks get fined heavily for inadequate systems on accounts they have opened and odd transactions out of keeping with the type of account. And of course a transparent register of the cases reported.

Member

Thanks for the link malcolm.

Is this sufficient? A very good question.

There are a lot of tax-payer funded actions listed, but not much from the banks. The section on Repatriating Victims doesn’t go into much detail but I would like to know how this would work. It mentions a repatriating funds programme that would probably mean only part of your money refunded, and frozen assets of scammers where you might get something back eventually, but nothing on the receiving banks that have allowed the scammers to operate that could mean all money was refunded.

Member

Hi Malcolm, It’s interesting you mention the board minutes and members lists. It was the first thing Meg Hillier, Chair of the Public Accounts Committee, questioned the Home Office Permanent Secretary about on Wednesday.

Until 24hrs prior to the session, no documents or notes had been published, then at some point after 12pm the documents we uploaded. However, the Chair also suggests some have since been taken down. You can watch the exchange here (starting at 15:20) http://parliamentlive.tv/Event/Index/3ca30053-8736-44f3-a63c-a1ffeb055e3a

There is also a wider point about the taskforce needing to measure and show what impact it is having. Again something that the NAO report raised and the Committee pushed them hard on.

Member

Hello Vanessa, thanks for the link. did find the discussion about the website. For those interested it was around 15:20. I agree that we should have transparency on matters of public interest. Now it has been brought to the surface I hope the website will be properly maintained. The content I saw did indicate significant work and progress, not just devoted to how to assess their own performance.

I wonder though why Which? are not involved in the task force? Or are they in some way?

Member
bishbut says:
20 October 2017

The government always moves very slowly on important necessary things it needs time to do the unnecessary things that it’s “advisors ” are always say want doing at once immediately if not sooner All should realise this as it keeps happening time after time

Member
Brian Austin says:
21 October 2017

Up to about 20 years ago, armed robbery was common; now it is rare because the banks took active steps to either prevent it or ensure the perpetrators were likely to be caught. They did that because they suffered the losses. At the moment, they often wriggle out of any liability so have no incentive to take action. Why allow accounts to be opened and then closed immediately money has been deposited and withdrawn? Stop immediate withdrawals. Why are bitcoins allowed when they are used by ransomware criminals?

Member

If you phoned a mate and asked him to pick you up outside a shop you were about to rob, your driver would become an accessory to that robbery and get arrested and charged.

If your money is stolen and passes through the hands of another bank, that bank becomes an accessory to that theft, but appears to be above the law as no arrests or charges are made.

Doesn’t seem quite fair does it?

Member

I think the “accessory” argument only works if your “mate” knew what you were doing. What if you called a taxi – would he be involved? If one of the banks knows they have a fraudulent customer and do nothing, then I’d agree they are liable; but if they do not know I don’t see how, unless their security is such that they should have known.

Member

A taxi driver would at least get interviewed.

The point is, we keep hearing the receiving banks don’t want to know or disclose information on fraudsters when funds go missing and this needs to change.

Member
Vic Williams says:
22 October 2017

If I went to a bank to open a new account I would have to jump through many “money laundering” hoops to establish my identity supported by various forms of documentation. My son has done this recently and it was an arduous process. How come the scammers who need these accounts to receive their ill-gotten gains appear to be able do it so easily?

Member

Stealing genuine people’s identities would be one way, and these are professional scammers who will know security systems and how to produce convincing documentation. A bit from the FT says:
https://www.ft.com/content/d2c03fd6-1f32-11e5-ab0f-6bb9974f25d0
……part of the rise may be explained by the move to force banks to allow savers to switch accounts within seven days, which offered criminals a chance to probe their defences. Recent figures from the Payments Council showed there had been a 7 per cent year-on-year rise in current account switching…….

Fraudsters use false addresses and easily obtainable cards such as retail store cards to build up a plausible electronic picture of credit activity, which banks take as evidence that they are dealing with a genuine applicant. If successful, some will use the account as a “springboard” into other financial products, such as mortgages, loans or credit cards, or making applications for high value items such as cars or electronic goods. Alternatively, organised crime gangs may take advantage of the account’s fictitious identity to launder money without fear of reprisal.

It would be useful if Which? asked the banking industry for a contribution on this particular topic.

Member
Peter D says:
23 October 2017

I fell prey to an internet scam despite checking the company was bona fide, registered at companies house, and had identified directors one of whom was named as the domain owner. Turned out the company had suffered from identity theft. However, it took over four weeks from the legitimate company realising a fraud was being perpetrated for the web-site to be closed down (or returned to the legitimate control of the company). I was also told by the MD that the company had been unable to close down accounts that had been opened in its name – despite there being a crime reference number. My bank simply said , the day after I had effected a transfer which I had then realised was probably a scam, there was nothing they could do. They did not contact the receiving bank and they didn’t advise me that I should contact the receiving bank until over a week later (which of course was too late to do anything). The banks have plenty of software to identify unusual transactions on the part of card holders, and as others have said, opening an account is subject to strict (?) money laundering identity checks. More could be done to prevent fraudulent accounts being opened and to freeze suspect accounts. More communication between banks, in particular after a fraud has been registered at ActionFraud, could help to freeze accounts quickly.

Member
Geoff L says:
26 October 2017

Why don’t the banks, EVERY month, email their customers telling them what NOT to do and advising of the latest scams (regardless of which banks were affected)? How much effort would that require?

Member
bishbut says:
27 October 2017

…and it could be done automatically with very little effort or expense

Member
Mr. D. Robson says:
1 November 2017

I am an executor for a very old friend, and claimed via Lloyds Bank for miss sold Packaged Account. The claim was successful, Lloyds Banking subsequently telephoned me around 5 pm , No caller ID on my mobile asking for : my date of birth , card number, sort code, and account number, I naturally declined, I could not verify the callers’ identity . I terminated the call, so much for Lloyds’ security. I would like your comments please ?