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Protecting customers from fraud is of the utmost importance for the finance industry

Katy Worobec, Managing Director of Economic Crime | UK Finance

4 min read

Responding to Maria Miller MP's debate this week on fraud in the banking industry, UK Finance's Katy Worobec calls upon the government to share information more readily for the purposes of preventing, detecting and investigating all types of economic crime.


Fraud is a menace whose impact is felt right across our society. Its harmful effects can change lives, its proceeds fund organised crime and every bank is determined to stamp it out.

Protecting customers from fraud is the number one priority for the finance industry, with hundreds of millions invested every year to tackle this growing issue and £6 out of every £10 of fraud prevented.    

Any case of fraud is one too many and we know that being a victim can result in an understandable loss of trust and confidence in the safety of banking.

That is why the industry runs awareness campaigns, such as Take Five to Stop Fraud, to help people spot the signs of a scam and protect themselves, and fully sponsors a specialist police unit to target the organised criminal gangs behind these crimes.

The law is clear that if a customer authorises a payment themselves, there is no legal protection to cover them for losses – unlike other financial frauds where the criminal makes a payment without a customer’s consent – however, banks will always do everything they can to recover any stolen funds as quickly as possible.

This industry is putting measures in place to ensure any customers who have fallen victim to fraud and scams get the help they need no matter who they bank with. UK Finance has also led the development of new banking procedures between police and bank branches to prevent vulnerable people from falling victim to fraud in the first place.

But we still need to do more.

Criminals are becoming ever more sophisticated, increasingly using online attacks and impersonation scams to steal personal and security information. Armed with these genuine details they will commit their crimes, including ID fraud to open and access accounts. They will also trick real customers into transferring stolen money through their bank accounts by acting as money mules. 

Banks cannot tackle this threat on their own. There are factors outside the industry’s control such as a retailer choosing not to use two-step verification for a card payment or a data breach at a technology company.

So the fight against fraud and scams requires public and private sector organisations to work together. Whether it’s banks refining their own security systems or a retailer holding customer data securely, everyone has a part to play.

We’re working closely with government and law enforcement through the Joint Fraud Taskforce to use our collective powers, systems and resources to crack down on financial fraud.

Sharing information between financial institutions, as well as law enforcement, is vital if we are to spot the fraudsters and identify potential victims quickly. But current legislation does not provide adequate safeguards to allow this to happen at the level and speed that we need.

Currently criminals can move funds faster than the financial sector can trace them, because at every stage, banks have to consider whether they are legally able to share information under the Data Protection Act, rather than being able to automatically do so.

That is why the financial sector has proposed to the government that it should be able to share information more readily for the purposes of preventing, detecting and investigating all types of economic crime, so that we can stay ahead of the criminals.

The speed in which money travels through the financial system in the UK has been intentionally designed, with an expectation from regulators that money can transfer between accounts within two hours. However, while this speed benefits legitimate customers, criminals also look to exploit it. We are proposing changes to allow banks to slow down payments if required to help prevent fraud.

We are also working with government on making possible changes to legislation about account opening procedures, so the industry can be even more proactive in preventing criminals from accessing the financial system.

And we are discussing with the government about reviewing current laws to see what changes are needed to give banks greater ability to return money to victims and allow criminal funds, currently frozen in bank accounts, to be potentially released and used to tackle fraud and scams.

The threat from fraud is constantly evolving and unfortunately there is no silver bullet to stop it. But together these initiatives will be an important step.

The finance industry is resolute in the fight against fraud and scams, in tackling those responsible and in supporting those who do fall victim to these crimes. By working with the whole of UK Plc, we can achieve this. 

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