In a rather chilling report coming from the UK, the amount of online banking fraud is rising and the advent of faster payments is making it more daunting. As The Guardian reported:
When Bristol resident Sarah Neville got an email from her carpenter saying that he’d had a cancellation and he could start her long-discussed home renovations, it didn’t arouse the slightest suspicion. Emails had gone back and forth, and when he asked her to pay a £1,500 deposit she quickly went online and made the payment direct into his bank account. It was only when he failed to turn up that the truth emerged – his email had been hacked and the bank account into which she had paid the money wasn’t his.
Neville is one of the hundreds of thousands of people who have lost money to fraudsters in recent years, a victim who quickly found out that the reassurances given when you sign up to online banking are worth nothing. A response to the noted rise in digital from at least one banker is rather surprising, given the history of the U.K. being on the cutting edge of regulatory reform:On Monday RBS’s Ross McEwan caused a storm when he claimed that it is not banks’ responsibility if customers are defrauded in such circumstances. The bank boss – who as part of his role also runs the NatWest brand, which has 24 million retail customers – said he didn’t think the bank had “a duty of care” to victims. They should accept the blame and not expect automatic refunds, he argued.
The banks are only required to refund victims for any payments that are “unauthorised”. Victims question how a payment can be considered authorised if it goes to a different person. But the banks’ default position is to assume the victim has acted in a grossly negligent manner – a stance that has been backed by the regulator, the Financial Conduct Authority.
Overview by Sarah Grotta
, Director, Debit Advisory Service at Mercator Advisory Group
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