“Urgent action” is needed by both banks and the government to tackle online fraud, a cross-party group of MPs has said.
‘The growing threat of online fraud’, a report published by the Committee of Public Accounts today, states that “banks are not doing enough to tackle online fraud”, while the government’s Home Office response “has been too slow”.
Moneywise investigated earlier this year whether banks are doing enough to beat scammers after reports from victims stated otherwise.
The report adds that campaigns to educate people and keep them safe online have so far been “ineffective” and “supported by insufficient funds and resources”.
Online fraud is now the most prevalent crime in England and Wales, according to the report. It continues that the cost of cyber crime is estimated at £10 billion, with around 2 million cyber-related fraud incidents last year. However, the true extent of the problem remains unknown as only around 20% of fraud is reported to police.
As a result, the Committee is calling on both the government and banks to work together to take more responsibility to tackle the problem head on – its key recommendations are as follows:
- The government sets out minimum standards for banks to follow on preventing online fraud and requires banks to report their performance.
- Banks should work with the government and other partners to make better use of technology and information to reduce card fraud and return money to customers. This should include establishing minimum technical standards for strong customer authentication for electronic payments.
- Banks need to work on information sharing so that customers are offered more protection from scams.
- The Home Office and its partners on the Joint Fraud Taskforce need to set clear objectives for what they plan to do, and by when, and need to be more transparent about their activities, including putting information on the Home Office’s website.
The report also criticises the response from local police to fraud as being “inconsistent”, and calls on the police to prioritise online fraud alongside efforts to tackle other sorts of crime.
‘Public and private sector need to work together’
Stephen Jones, chief executive of UK Finance – the banking trade body – comments: “The banking sector is committed to preventing customers falling prey to financial scams, investing hundreds of millions every year to tackle this growing issue and preventing £6 out of every £10 of fraud.
“The fight against fraud and scams requires public and private sector organisations to work together. Sharing information between institutions is an essential part of the fight but current legislation does not provide adequate safeguards to allow this. We want to build on our current close partnership with the government and regulators to make the changes necessary to protect customers and prevent more scams without slowing down genuine transactions, and to make it clearer to customers when they can expect a refund if they have been the victim of payment fraud.”
See our Scams and rip-offs section for more information on how to stay safe online.