Should banks refund victims of online fraud?

[charitynjw]

https://conversation.which.co.uk/money/met-police-commissioner-bernard-hogan-howe-bank-fraud/?utm_source=whichcouk&utm_medium=email&utm_campaig n=onlinefraud24031

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24 MARCH 2016 / MONEY, TECHNOLOGY

Should banks refund victims of online fraud?



Richard LloydExecutive Director

COMMENTS 569


The Times reports that Met Police Commissioner Sir Bernard Hogan-Howe has said victims of online fraud should no longer be refunded by banks if they fail to protect themselves.

With online fraud increasing, this is an astonishingly misjudged proposal from the Met Police Commissioner.
Sir Bernard on bank fraud

The front page of The Times reports that Sir Bernard Hogan-Howe said:

‘If you are continually rewarded for bad behaviour you will probably continue to do it but if the obverse is true you might consider changing behaviour. To be fair to the banks, if one says they’ll do it and the others don’t that’s a competitive advantage.
‘The system is not incentivising you to protect yourself. If someone said to you, “If you’ve not updated your software I will give you half back”, you would do it.’

However, the priority should be for banks to better protect their customers, rather than trying to shift blame on to the victims of fraud.
Reimburse fraud victims

Of course, it’s vital to educate consumers about how to avoid fraud, but suggesting that banks could make people more security-conscious by refusing to reimburse fraud victims risks sending the wrong signal about the banks’ own crucial role in preventing crime.
We know that scammers are using increasingly sophisticated techniques to defraud people out of their money, in many cases beyond the control of consumers.
We believe that banks should be doing more to improve their security processes and systems, share their intelligence to prevent fraudulent activity, and support their customers when they fall victim to crime.
Banks inconsistent with fraud

In September 2015, we found that banks were inconsistent when dealing with fraud. A Freedom of Information request revealed that the Financial Ombudsman Service uphold around one in four complaints relating to fraud and disputed transactions in favour of the customer, stating that in many cases banks have based their decisions ‘on a hunch’, without conducting a full investigation.
The Met has since clarified Sir Bernard’s comments, saying that he also agrees banks need to consider investing more in their security systems. However, if banks did not have to reimburse victims, what incentive would they have to protect their customers from fraud in the first place?
Should banks reimburse victims of online fraud?

• [*=left] Yes
  [*=left] No
  [*=left] Don't know

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USEFUL LINKS:

• Which? advice on how to bank safely online
• Best banks for dealing with bank fraud

[wales01man]

Re: Should banks refund victims of online fraud?

Anyone caught out by a fraudster does so willingly in many case because they think they are getting a good deal, advice is to never pay by bank transfer which is the payment method most commonly used if people ignore advice they must take the blame.

If banks repaid money it would lead to another fraud false claims where fraudsters set up other scams

[Snoopy1948]

Re: Should banks refund victims of online fraud?

An extremely interesting post!

A few months back, I purchased a pair of Ugg boots for my wife at an third of the shop retail. Initially I believed I was on a genuine Ugg site ( it was via a FB posting, which clearly cannot be trusted as I have now concluded ) and I used a credit card as I have to say that I was just more than a little suspicious at the point of checkout.

Sure enough, it quickly unfolded that I was dealing with a non approved Chinese seller and that the boots would almost certainly now be counterfeit. The boots arrived after ten days and they were clearly counterfeit in every way ( my wife already has a genuine pair and we researched how to detect a counterfeit Ugg product ).

MY credit card provider, HSBC, undertook a 'chargeback' claim for me and credited my card accordingly.

However, I had to show that I had made every attempt to resolve the matter direct with the retailer, which I had. And they also made me aware that should their attempts to resolve the chargeback claim with the Chinese retailer fail, I will be recharged again.

So, yes, I agree that the customer has to balance his own responsibility here and not just use a credit card for the protection it may bring, regardless of their own personal suspicions and therefore culpability in the matter. Certainly, had I taken a step back here, I would not ( or certainly should not ) have completed the checkout. And indeed, I should have been more sensible in not expecting a pair of genuine Ugg boots at a third of the UK retail. There's a bit of soul cleansing for you!

Interestingly enough, Uggs have now been made in China for a little while now under licence. And even so, Ugg customer services in the UK washed their hands entirely of my complaint which they should have pursued, bearing in mind genuine Ugg web pages were used as was official customer service numbers.