The Times reports that Met Police Commissioner Sir Bernard Hogan-Howe has said victims of online fraud should no longer be refunded by banks if they fail to protect themselves.
With online fraud increasing, this is an astonishingly misjudged proposal from the Met Police Commissioner.
Sir Bernard on bank fraud
The front page of The Times reports that Sir Bernard Hogan-Howe said:
‘If you are continually rewarded for bad behaviour you will probably continue to do it but if the obverse is true you might consider changing behaviour. To be fair to the banks, if one says they’ll do it and the others don’t that’s a competitive advantage.
‘The system is not incentivising you to protect yourself. If someone said to you, “If you’ve not updated your software I will give you half back”, you would do it.’
However, the priority should be for banks to better protect their customers, rather than trying to shift blame on to the victims of fraud.
Reimburse fraud victims
Of course, it’s vital to educate consumers about how to avoid fraud, but suggesting that banks could make people more security-conscious by refusing to reimburse fraud victims risks sending the wrong signal about the banks’ own crucial role in preventing crime.
We know that scammers are using increasingly sophisticated techniques to defraud people out of their money, in many cases beyond the control of consumers.
We believe that banks should be doing more to improve their security processes and systems, share their intelligence to prevent fraudulent activity, and support their customers when they fall victim to crime.
Banks inconsistent with fraud
In September 2015, we found that banks were inconsistent when dealing with fraud. A Freedom of Information request revealed that the Financial Ombudsman Service uphold around one in four complaints relating to fraud and disputed transactions in favour of the customer, stating that in many cases banks have based their decisions ‘on a hunch’, without conducting a full investigation.
The Met has since clarified Sir Bernard’s comments, saying that he also agrees banks need to consider investing more in their security systems. However, if banks did not have to reimburse victims, what incentive would they have to protect their customers from fraud in the first place?
Should banks reimburse victims of online fraud?
Yes (97%, 28,600 Votes)
No (1%, 424 Votes)
Don't know (1%, 403 Votes)
Total Voters: 29,427