At last! Banks will be able to trace cash stolen by the scammers
It’s a major breakthrough for the Mail’s campaign . . . now what about the rest of our six-point manifesto?
BRITAIN’S biggest banks are trialling a new system that enables them to trace stolen money, Money Mail can reveal today.
Typically, when someone is tricked into transferring cash to a fraudster, the money is then bounced quickly from account to account so it is hard to keep track of where it goes.
The new system allows banks to see where the money ends up and act quickly to freeze it. It is a major victory for our Stop The Bank Scammers campaign and means victims should have a far greater chance of getting their money back.
We can also disclose today that banks are working with telecoms giants on a new system to stop scam text messages getting through, which is also something we called for.
It is currently almost impossible to tell if a text is really from your bank, as most appear in the same chain as genuine messages. It means it is easy for fraudsters to convince people to call scam numbers or follow links to fraudulent websites and become a victim of a con.
One bank told Money Mail it is considering scrapping texts altogether as it may be more secure to send messages to customers through its mobile banking app. Others have said they are considering removing phone numbers from messages, so that customers would know never to call a number included in a text message.
Meanwhile, new rules that spell out what banks must do to help prevent customers falling victim to fraud are expected to come into force at the beginning of next year.
It is hoped this new code of conduct will force banks to be consistent in how they deal with complaints about fraud. The consultation on the new rules closes tomorrow.
In September, Money Mail launched a major campaign for fairer treatment for those tricked into handing over their life savings. Banks logged 34,128 cases of so-called push payment fraud in the year to July — almost 200 a day. Just £31million of the stolen £145million was returned to customers, according to trade body UK Finance.
To tackle the problem, we published a six-point action plan. Today we reveal what we’ve achieved so far — and what work still needs to be done.
1. FOLLOW THE STOLEN MONEY
WE SAID: ‘Criminals bounce stolen money from account to account — often within the same bank — so it becomes “lost”. Once money leaves someone’s account it is typically gone for good. Banks must set up an industry-wide system that enables them to trace where that stolen money goes — to give them a chance of clawing it back.’ PROGRESS: Banks last month began trialling a new system that allows them to do just this. If a bank cannot claw back a victim’s money, they can now enter details of the accounts the cash was taken from into a central system run from Vocalink, part of Mastercard.
This firm then uses information provided by the Faster Payments Service, which logs all payments made by banks, to trace where the money went — even if it was split into smaller sums.
A spokesman for payment services provider Pay UK says: ‘The information gathered has already been used by banks to disrupt criminals by identifying the “mule” accounts so they can be blocked, the money frozen and further investigated’.
However, this does not mean victims are guaranteed to get their money back, as it may have been transferred abroad or withdrawn in cash.
If there is not enough money left in the account to refund all victims, it is unclear who should get the cash. The banking industry is calling on the Government and regulators for help refunding victims.
2. MAKE BANKS ACCOUNTABLE
WE SAID: ‘If they have not done enough to stop fraudsters opening accounts they use to store stolen funds — for example if scammers have used a fake ID — the banks must be responsible for the losses and refund the money.’
PROGRESS: New rules set to introduced next year should mean banks are forced to refund victims when it can be proved they made a mistake.
In a draft code of conduct publishade in September it said that in the event banks do not meet their responsibilities they should
£1MILLION-A-DAY BANK SCAMMERS PREYING ON YOU
refund victims unless they have ‘good reasons’ not to — such as the customer failing to take reasonable care.
Banks have admitted that it is right that customers who are victims of a scam are refunded even when the bank has not done anything wrong.
But there has been no agreement as yet on who will fund this compensation scheme.
3. SET UP FRAUD HOTLINES
WE SAID: ‘All banks must have a dedicated fraud hotline that victims can call 24 hours a day/ seven days a week. Currently, delays reduce the already small chances of banks being able to claw back their money.’ ProGreSS: Most major banks, including Barclays, HSBC, Lloyds, rBS/NatWest and Santander, have a 24-hour fraud telephone line.
TSB’s fraud team, however, only works from 7am to 11pm during the week and 9am to 5pm at weekends. TSB says you can still use its out of hours service if you need to freeze your card or account.
Some banks, including TSB, will still not accept calls from noncustomers. So if your money has been transferred to one of its accounts you’ll be turned away.
4. PHONE FIRMS MUST HELP
WE SAID: ‘Telecom providers should identify and stop scam text messages and calls getting through. Untold numbers of victims are caught out because the scam message appears within a string of genuine communications from their bank.’ ProGreSS: Banks have told Money Mail they are now working closely with telecoms firms to stamp out scam messages and calls.
one idea is for all banks to share with network providers such as ee and Vodafone which third-party companies they use to send text messages to customers.
This means that if a message claiming to be from the bank is sent via a different route the mobile firm will know to block it.
In october, the telecoms watchdog ofcom said it will confiscate any phone numbers that have been found to cause harm and anxiety.
A spokesman says: ‘Malicious number spoofing is a complex problem. We continue to work with the industry and our partner regulators in the uK and overseas to tackle it.’
5. WATCHDOGS WITH TEETH
WE SAID: ‘The Payment Systems Regulator should draw up clear rules on exactly when banks should refund fraud victims — and police these rules strictly. The Financial Ombudsman should be given more power to investigate fraud regardless of who the customer banks with.’ ProGreSS: City watchdog the Financial Conduct Authority (FCA), has proposed that the ombudsman should be able to investigate complaints about banks that receive stolen funds — even if the victim is not their customer.
Currently, you must be a customer of the bank to lodge a complaint.
The FCA is expected to announce a final decision before the end of the year. Clear rules on when banks should refund victims will be included in the Payment Systems regulator’s new code of conduct, due to be launched in 2019.
6. COMPENSATE VICTIMS
WE SAID: ‘A total of £130 million is sitting in frozen accounts once used by criminals. With a simple change in the law, it could be used to compensate victims.’ ProGreSS: So far, the Government has refused to refund this money to victims and banks have said they cannot do so without a change in the rules.
A Treasury spokesman said: ‘We set up the Payment Systems regulator to ensure people can move their money with confidence, but more must be done to help victims of push payment scams. That’s why we back the regulator establishing a group of consumer and industry representatives, to look at how best to reimburse victims.’