![]() Why We Need to Get to the Root of the Fraud Issue While it’s true that some of these losses can be blamed on third-parties – such as payment details being stolen in retailer data breaches – ultimately, financial organizations need to have more rigorous procedures for identifying and stopping fraudulent online transactions taking place. The remaining £358 million worth of loss is attributed to unauthorized fraud, such as criminals stealing and using credit card details and account information. ![]() While some fraud, such as APP, is not the fault of the bank, often it could have been halted if the bank had better fraud prevention or security solutions in place for its customers.įurthermore, APP only makes up a fraction of the more than £500 million UK Finance has counted as fraud losses in the first half of 2018. This proposal threatens to set a very dangerous precedent when it comes to responsibility for fraud. This immediately hit a bad note with UK consumer groups, with the head of Which? among many saying that neither consumers or victims should be paying for this issue, and that the cost ‘needs to sit with those that are best placed to manage risk and protect customers’ – which is the banks. Jones’ proposed solution to this is to “make a tiny levy on each payment” in the UK, to ensure that funds exist to compensate victims. Stephen Jones made his case to the influential UK Treasury committee, stating it should not always be lenders that pay out when criminals trick consumers into transfers.Īs mentioned in our previous blog on banking fraud, data from UK Finance shows that £145 million was stolen in the first half of 2018 through ‘authorized push payment’ (APP) scams, with only £31 million returned to the victims. This week, the head of UK Finance – a trade association for the UK banking industry – argued that consumers should pay tax on transactions to generate a fund for compensating victims of fraud.
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