Banks are not doing enough to combat online fraud and need to take greater responsibility, MPs have said.
They demanded financial institutions ‘step up’ to tackle the issue as the problem is ‘too vast’ to be tackled solely by Government.
Ministers must ensure that banks find more ‘effective’ ways to tackle fraud and that they are held to account for this.
They also need to be held responsible for returning money to customers who have been the victim of scams, the MPs said.
Banks are not doing enough to combat online fraud and need to take greater responsibility, MPs have said (file photo)
The Public Accounts Committee (PAC), revealed that online fraud is now the most prevalent crime in England and Wales.
It estimates that the cost of the crime is £10billion, with around two million incidents of cyber fraud last year.
However, this is a huge underestimate of the ‘enormous issue’ as just 20per cent of fraud is thought to be reported to police, they say.
The crime does not just affect victims financially, but causes ‘untold distress’ to those affected which deters them from coming forward, it adds.
It said the problem was ‘too vast’ to be handled by the Home Office alone and banks should take more responsibility.
The Home Office response had been ‘too slow’ and the banks were ‘unwilling to share information’ about fraud with its customers, it said.
The report concludes: ‘The balance needs to be tipped in favour of the customer.’
It also criticises the response from police across England and Wales as ‘inconsistent’ and urges them to prioritise online fraud.
They demanded financial institutions ‘step up’ to tackle the issue as the problem is ‘too vast’ to be tackled solely by Government. The problem is affecting young people, MPs say (file photo)
But most of its criticism is reserved for banks, who it says need to take more responsibility and to offer protection from scams.
It said that banks do not accept enough responsibility for preventing and reducing fraud as they are not required to provide data for individual institutions.
This means that customers do not know which banks are best are protecting them from online fraud.
The report concludes that shifting more responsibility on to banks for scams is likely to make them better at protecting customers.
‘Banks are not doing enough to tackle online fraud and their response has not been proportionate to the scale of the problem,’ the report said.
‘Banks need to take more responsibility and work together to tackle this problem head on.
‘Banks now need to work on information sharing so that customers are offered more protection from scams.’
Age UK said that elderly people stopped using their computers, unplugged their phones and, in the worst cases, ended up in care homes because they have been victims (file photo)
It adds: ‘The Department must also ensure that banks are committed to developing more effective ways of tackling card-not-present fraud and that they are held to account for this and for returning money to customers who have been the victims of scams.’
MPs also say that campaigns to educate people and keep them safe online have so far been ineffective and are ‘supported by insufficient funds and resources’.
They warned that the problem was starting to affect young people, despite the perception that it only affects older people.
The report warns that social media plays a significant role in online scams and said further education was needed to make young people aware of the dangers of sharing personal information online.
Labour MP Meg Hillier chaired the committee that said Banks need to do more to combat internet fraud
The City of London Police told the committee that young people can be more vulnerable to fraud than older generations as they have a very different approach to personal information.
They cited examples of young people sharing pictures of their passports and driving licences on social media.
Age UK told the committee that elderly people stopped using their computers, unplugged their phones and, in the worst cases, ended up in care homes because they have been victims.
The committee’s chair, Labour MP Meg Hillier, said: ‘Online fraud is a virulent and unprecedented threat that has taken hold rapidly, causes untold misery and costs individuals and businesses billions of pounds each year.
‘The Government accepts there is an enormous amount of work needed to tackle the problem – work that in our view must put people first.
‘Banks in particular need to step up, take responsibility and focus sharply on protecting and informing their customers.’
She added: ‘Online fraud affects people of all ages and backgrounds. Young people are increasingly likely to fall victim to a crime which is perceived primarily as affecting the elderly and vulnerable.
‘The Government must get better at explaining the tricks employed by fraudsters to target different groups, and set out clearly the action it is taking to tackle them.’