By Will Sturgeon, 23 March 2005 16:30
NEWS UK banks are being urged to confront the problem of identity theft and fraud and put to rest a culture of 'not on my watch' denial which is holding back the fight against such problems.
Last week's foiled £220m Sumitomo heist shows banks are still in the firing line of fraudsters yet too many continue to deny they have a problem with fraud. And consumers too are in the criminals' sights with identity theft - the UK's fastest growing crime - costing £1.3bn last year.
Banks' reluctance to admit a problem is due in part to fears such admissions will count against them and the conspiracy of silence born from such thinking.
Peter Dorrington, head of fraud solutions at SAS, said: "If banks admit they have a problem with fraud they assume it will reflect badly on them. But everybody knows banks have a problem with fraud."
Dorrington said banks should begin to engage in far more frank discussions about the extent of the problem and the nature of the frauds being committed.
Capital One is one organisation which is being very proactive in addressing the issue of fraud, offering customers protection against fraud and running high-profile television advertising campaigns about the dangers of identity theft.
"Capital One is saying something we already know but at least they are saying it openly," said Dorrington. "I applaud them for that."
"Are they admitting by running television adverts about identity theft that they have more of a problem than anybody else? No of course not. In fact because they are talking about this so openly I suspect they have less of a problem than many other banks," said Dorrington.
A spokeswoman for Capital One told silicon.com: "Fraud is something our customers are very concerned about. We're the first to really talk so openly about this issue."
Capital One has a policy of no-fraud liability if a customer can show they took reasonable steps to protect their identity and banking details.
"Unless the customer has done something like written their PIN number on their card they won't suffer any loss as a result of fraud," added the spokeswoman.
Capital One admits one reason for talking openly about fraud is to try to lower its own fraud losses but the spokeswoman added: "The main reason is to deliver a valuable service to our customers."
"A number of our competitors are starting to talk more openly about this problem as well," she added.
Dorrington said: "Everybody involved in tackling this issue needs to be a lot more honest."
Comments
There are 5 comments. Join the discussion
1. Jamie Bishop
Perhaps the more significant fraud is the legalised fractional reserve banking system developed by the bank of England in the 1690's and perpetuated by the criminals in UK and USA governments that have allowed the likes of the Rothschild's and Morgans to run a massive cartel for far too long. Compare that to the problem of Internet fraud and you will realise you are scratching a nit on a gnat's nut. First thing to do is sort out our own banking practices which are designed to keep some people poor so they may be enslaved to the rich!
That probably sounds radical but I find it overwhelmingly tiring to hear about banks that cannot be bothered to sort out Internet fraud, just ask yourself why is it that banks don't want to admit the vault doors are wide open to hackers and scammers?
Let's face it, banks can afford it and ironically any losses will be mittigated in further extortionate fees anyway.
When "new labour" handed the managment of the economy to the bank of England they gave them a license far more powerful than any government has ever had.
Stop whimpering about the problem and legislate banks into tools of the state rather than visa versa. Banks should be there for the benefit of mankind rather than weapons held by the few super rich to keep their world comfortable.
2. Ian Savell
The banks' problem, not ours.
Some banks are already taking basic security steps like not revealing full card numbers on receipts. More action is needed. Banks like to process as much of our money as possible as quickly as possible but they must still apply basic security measures and ensure they have the right customer. If they don't, its their fault not ours. We shouldn't haveto become a nation of shredders!
3. anonymous
One of the reasons why banks won't admit to the levels of fraud, is that they have no clear answer the the obvious question: "So what's being done about it?".
The banks fear that if people realise how easy it is to commit fraud and that neither the banks nor the police have the resources to tackle it, the problem will get much worse as everybody jumps on the bandwagon.
4. Tom
I think that we all have a responsibility for tackling fraud! Yes, we as individuals need to take precautions such as shredding bank statements to protect our identities too. Obviously the banks need to put in procedures to ensure that our accounts can't be accessed without proper authorisation, but saying that the banks have to solve it on their own isn't realistic.
5. Rob
Fraud doesn't lose them as much money as they lose themselves. I have seen a Bank (client) waste upto £30,000 in one day on a promotional photoshoot just because they didn't plan what they wanted first. Nobody seemed to batter an eyelid at it either.
All I could think about was the fact that loads of people have just been fined at a cost that need not have been so high, just to cover this.