‘Banks must do more to stop cyber-fraud’ – MPs

Banks are not doing enough to combat Britain’s £10bn online financial crime surge, MPs have warned.

The Commons Public Accounts Committee (PAC) said banks must take more responsibility for preventing cyber-fraud, which is now the most common crime in England and Wales.

The PAC also called for much greater transparency from banks as the true extent of the problem is not known, with only around 20% of incidents reported to the police.

The study states: “Banks do not accept enough responsibility for preventing and reducing online fraud and there is no data available to assess how well individual banks are performing.

“Banks can refuse to reimburse customers who have been scammed and ‘voluntarily’ transferred money, and shifting more responsibility on to banks for scams is likely to make them better at protecting customers.”

The report also hit out at the Home Office for its “slow response” to the problem and described the police approach as “inconsistent” across the country. The PAC said campaigns aimed at protecting people had been “ineffective” and under-resourced.

MPs warned that card-not-present fraud, where criminals use stolen card details, has doubled in five years to 1.4 million known incidents in 2016.

The study found that between 40%70% of people who get scammed into transferring funds to fraudsters never get their money back.

“Banks have different policies for under what circumstances to refund money. Banks are also reported to be holding at least £130m that has been frozen because it is fraud-related, but which cannot be accurately traced and returned to victims,” the report said.

Despite the perception that online fraud mainly affects the elderly and vulnerable, the report said young people are increasingly likely to fall victim to scams due to their use of social media.

The report said banks should be given minimum standards to follow and be required to report to the Government on their performance in combating crime. Despite the Government acknowledging there is an “enormous amount to be done” to combat fraud, it currently relies on voluntary participation by the financial industry, the report states.