Banks call for more collaboration outside the industry to tackle transfer scams

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Banks will be able to reimburse victims of fraud on their own through wire transfer rather than a temporary shared cash pot, a trade association said.

K Finance said the central pot was initially put in place in the hope that a long-term solution, also involving online platforms, would be put in place to help pay off customers – but that doesn’t happen. was not yet produced.

Scams often originate from outside the banking industry. Some come from information obtained through corporate data breaches, which can be used to make fraud more convincing, or from bogus online advertisements for products such as investments.

The interim funding pot was originally put in place because we asked the government and regulators to work with industry to find a long-term solution to funding “ blame-free ” cases involving d ‘other sectors such as online platforms, which are used by criminals to perpetrate fraud, contributing to customer reimbursement. Unfortunately this has not happened yetKaty Worobec, UK Finance

Banking giant Lloyds said the focus should be as much on scam prevention as it is on reimbursement.

Katy Worobec, Managing Director of Economic Crime at UK Finance, said: “The interim funding pot was originally put in place because we asked the government and regulators to work with the industry to find a long-term solution. term funding of non-liability cases, involving other sectors such as online platforms, which are used by criminals to perpetrate fraud, contributing to the reimbursement of the customer. Unfortunately, this has not yet happened. “

UK Finance said the change introduced on Friday would simplify the process for banks that have subscribed to a voluntary industry code that reimburses people who are tricked into transferring money directly to a fraudster.

He said the change will not affect reimbursement to customers and that the new process only applies to banks that are part of the voluntary code.

The Authorized Push Payment Scam (APP) code has been put in place to reimburse people in situations where neither they nor their bank are to blame.

However, there are concerns that not all banks interpret the code the same, and in some situations victims of scams are assumed by banks to have sophisticated financial knowledge.

The APP’s “no blame” scam cases were funded through an interim deal, in which seven banks and construction companies fund a central pot. Banks reimburse customers directly in such cases and then collect the money from the pot.

UK Finance said multiple foreclosure restrictions have resulted in a change in the way people live their daily lives, with people doing more activities online.

He said criminals have adapted the scams to reflect these changes, exploiting technology platforms to prey on victims.

Vim Maru, Group Director, Retail Banking, Lloyds Banking Group, said: “When the Central Funding Agreement was first put in place, these ecosystem organizations were expected to be larger. large also contribute.

“As this has not happened, the arrangement is no longer necessary. Protecting our customers against fraud remains our priority and we are committed to reimbursing victims of scams in accordance with the voluntary code.

“Identifying and preventing fraud requires the combined efforts of all sectors.

The emphasis must be on prevention as well as reimbursement, starting with the inclusion of financial fraud in the next bill on online security.Vim Maru, Lloyds Banking Group

“It is disappointing that many organizations outside of financial services have been slow to adopt measures to stop fraud, given that scams often originate outside the banking industry and we know it influences locations. where scammers operate.

“The emphasis must be on prevention as much as on reimbursement, starting with the inclusion of financial fraud in the next bill on online security.”

UK Finance said the banking and financial industry is investing millions in cutting-edge technology to protect clients from fraud while working closely with government, law enforcement and sectors such as telecommunications to shut down criminal gangs.

But he said a more holistic approach – which includes the tech and online sectors – is still urgently needed.

UK Finance said economic crime should be included in the scope of the online security bill.

Chief Detective Inspector Gary Robinson, Unit Head of the Dedicated Cards and Payment Crime Unit (DCPCU), said: “We would love to be able to partner more closely with the platforms. online.

“Recent collaborations with social media and telecommunications companies have enabled the DCPCU to successfully delete 731 social media accounts linked to fraudulent activity, of which 258 were involved in recruiting mules.

“Everyone should play their part in the fight against fraud, including members of the public who are reminded to protect themselves by taking a moment to stop and think before parting with their money or information. Contact your bank immediately if you think you have been scammed. “

Gareth Shaw, which one? CFO, said, “The repayment rates for wire transfer scams for some companies are woefully low, so it’s important that any change in the funding agreement results in an improvement in these numbers, not a further decrease.

“This move should also prompt banks to improve their security measures and anti-fraud warnings, which in some cases have proven ineffective in preventing crimes that can lead to the death of people, changing sums of money.

“Ultimately, much stronger improvements are needed to ensure that victims of this type of fraud are treated fairly.

“The regulator must work with the government to establish mandatory consumer protection standards for all banks and payment providers, with strict enforcement to ensure people are treated fairly and consistently when trying to collect their money. losses.”

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