Telegraph Money readers have thrown their weight behind a new payments system and called for banks that allow fraudsters to open accounts to be automatically held liable for the losses of scams.
In response to the publication of this newspaper’s demands for a new rulebook on refunding victims of bank transfer fraud, many readers wrote and emailed to suggest ways the system could be fixed.
The consultation on a code of conduct designed to give victims certainty over when they will get their money back closes this week, with a final set of rules due to come into force in the new year.
The current proposals establish that any victim who took all due care but still found themselves losing money to scammers should get their money back – but Telegraph Money has pointed out that the banks are currently trying to force consumers to foot the bill.
Readers of the newspaper were supportive of a forthcoming system called “confirmation of payee”, which will mean banks will have to check the name registered on an account against the name of the intended payee. They also said the so-called “recipient bank” should be forced to shoulder the burden.
Here are some of your comments:
All the scams seem to have a recurrent weak point, and that is being able to set up a new payee and move money immediately. What if you added a day’s delay in the setup and use? I am trying to think of an everyday scenario where you would need to do this that couldn’t be covered with a bit of planning.
It would take a more sophisticated scam to persuade you to set up a new payee, wait 24 hours and come back to have you pay them the money. It would also create a break or cooling off period where the sequence of events in getting you to create a new payee could be reconsidered.
It could also trigger the bank to send out a reminder that new payees could be the subject of a scam during that 24-hour period.
If a bank allows an account to be opened by a fraudster with fake ID then I think the bank should be liable for any resulting fraud.
Explicitly stopping banks hiding behind GDPR as an excuse not to help when fraud is reported would also be helpful, as would requiring all banks to have their fraud desk staffed 24/7 – there have been too many cases reported in the Telegraph where a fraud victim has not been able to get through to their bank in a reasonable space of time.
A J Methven
I fully back the Telegraph’s demands to the consultation on the new rule book. The Government should be doing what is best for its people, not what is best for corporations.
As an individual one has no power against banks, so the rules must be fair for those who are defrauded. If banks were liable, they would soon swing into action and minimise fraud.
Why is it always such a fight just to try and get what is fair for the general population from the Government?
May I suggest that it cannot be that difficult for all high street banks to be made to insist that any new customers wanting to open new accounts must present themselves to the bank with their passports.
The teller will confirm the customer is the one pictured on the passport and if a fraud is attempted the photograph is available for identification.
If the customer does not have a passport the teller will advise him/her that the bank is required to take a photograph there and then before an account can be opened. Also, any bank instructed to remit funds over a certain amount should text the client asking for confirmation that the order is genuine.
Non-high street banks must have confirmation from someone on the electoral roll that the client is genuine. The bank should contact that person before opening the account. Any unusual instructions must be confirmed.
Anonymous, from Lincoln
I totally agree with the five points you make to improve the proposed code, without which it will be toothless.
However I would also suggest that any negligence or failure in its duty of care by a bank leading to the opening of an account used for criminal purposes amounts to aiding and abetting the fraud and therefore the bank should be criminally liable jointly and severally with the fraudster to any party defrauded by the use of such an account – whether or not the defrauded party has a contractual relationship with the bank concerned.
The only way to make the banks really sit up and co-operate is to make them criminally liable.
In my book the banks are very much at fault. They are attempting to force people to convert to electronic banking, the tactics they use are to close many branches and the branches left open have only two till positions and it is common practice for only one of the tills to be open, resulting in long queues, which is vexing.
Without electronic banking most of the frauds the article is concerned with would not be possible. I suspect the banks are quite happy with this as it is not their money – they would bring in more stringent safeguards if it were their money at stake. Why is the cheque system hedged with so many safeguards? Perhaps the banks have been bitten before.
Under the present electronic system I wonder what the banks will do when we are all paupers thanks to bank fraud.