The nightmare begins with a seemingly innocuous call or email, purporting to be from your bank, a solicitor, an online retailer or even from the police.
You are drawn into an entirely credible conversation and in good faith disclose security information – passwords, PINs, account details – before making a transfer of funds. And then the contents of your account disappear into the ether.
Banks describe it as ‘authorised push-payment fraud’ – financial jargon that does no justice to the cruelty of the scam, or the misery it inflicts. It is a huge criminal enterprise that infects the whole high street banking system.
As the Mail reveals today, Britons will have been fleeced of at least £300million this year alone if current rates are maintained, with thousands of victims.
Unlike with debit or credit card fraud – in which there is a limit on liability once you have informed the card issuer – banks will often refuse to refund a single penny.
Your losses are likely to be deemed to be entirely your own fault – hence the term ‘authorised’.
The nightmare begins with a seemingly innocuous call or email, purporting to be from your bank, a solicitor, an online retailer or even from the police
It is grotesquely disproportionate that banks making billions of pounds in profit between them can abandon loyal customers in this way.
A central compensation fund would go some way to addressing the injustice – not least because it’s the banks that are making their customers vulnerable to fraudsters through relentless pressure to shift accounts online.
More from Ruth Sunderland for the Daily Mail…
For them it’s far cheaper than maintaining a branch network. Branches are closing at the rate of 60 a month, and even ATM machines are being mothballed due to cost-cutting, despite vociferous protests from communities that are being turned into banking deserts.
Many victims are elderly and vulnerable, but by no means all. We are all finding our way with new and constantly evolving technology, and even the most astute customers can be ensnared in the web of deceit. Those taken in have even included finance professionals.
I shudder at the memory of how I almost gave away security information at the prompting of an authentic-looking email, supposedly from Amazon. It said there was a problem with an order and asked me to submit my payment details again.
At the last minute I checked the order number on the email against my Amazon account and realised it was bogus. I also refuse to bank online – despite constant blandishments to do so – until I am persuaded that fraud safety nets are vastly improved.
The banks expect us to exist in a permanent state of hypervigilance and instead of doing their utmost to protect our accounts and help defrauded customers they eschew responsibility. Victims are blamed even though they did not recklessly divulge information, but were inveigled into doing so by sophisticated and practised criminals.
You are drawn into an entirely credible conversation and in good faith disclose security information – passwords, PINs, account details – before making a transfer of funds
All they are guilty of is an unguarded moment – hardly a crime that deserves to be punished with the loss of thousands of pounds of savings. Technically, the banks may be within their rights, but their stance is unsympathetic, unethical – and yes, immoral.
They boast of state-of-the-art detection systems that are supposed to identify and block unusual transactions. So when these fail to prevent push-payment fraud, they must share in the responsibility.
And how is it that legitimate savers are put through the third degree when trying to open a new account, but fraudsters somehow find it easy to operate accounts to receive their illicit transfers? Why are the banks that receive the cash extracted by deception able to hide behind data protection rules and refuse to co-operate in efforts to retrieve and return it?
The truth is that while the banks aren’t footing the bill for these scams, there is little incentive to stop them, or bring the guilty to book.
New technology can give real benefits to customers in terms of convenience, lower costs and help with money management. But it will come to naught if we cannot be confident in the security of the technology – and if we are abandoned by our banks the moment fraudsters pounce.