Fraud and financial crime make up nearly half of all crime. Fraud is both a criminal offence and a civil claim.
The banks should be doing all they can to prevent and identify fraud.
Next year will see the introduction of confirmation of payee, i.e. a person having to confirm the identity of the payee. However this may not necessarily stop that much fraud as with fraud often there is an intention to send money to a payeee. Confirmation of payee will merely reduce cases of mistaken payment. It is envisaged that banks will begin implementing confirmation of payees next year with full compliance by 2021.
It is a positive step from the banks, hopefully the first of many.
In the 12 months to June, the latest Crime Survey of England and Wales found that nearly half of all crimes – five million out of close on 11 million – were frauds. Separately, Financial Fraud Action says that recorded fraud across all payment systems totalled £769m in 2016. The Payment Systems Regulator is consulting on a “contingent reimbursement” model, which would make banks responsible for losses where they “have not met the required standards – provided the victims have taken appropriate care” Banks let crooks open accounts, allow fraudulent transfers and usually fail to follow stolen money to its final destination. If there is negligence, it is surely with the banks. Making them liable would speed up designing theft out of the money transfer process, just as car theft has been designed out of vehicles.