Banks are not doing enough to combat online fraud,which has an estimated cost of £10bn a year to victims, a new report into fraud has claimed.
The Commons Public Accounts Committee (PAC) has issued an online fraud report which is calling for increased transparency and action from banks when it comes to online fraud.
An it warned that despite cyber-related fraud being the most common crime in England and Wales the true extent of the problem is not known. Indeed just 20% of incidents reported to the police.
The study read: “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 onto banks for scams is likely to make them better at protecting customers.”
The study found that between 40% – 70% of those who are scammed are into transferring funds to fraudsters never get their money back.
And with that in mind the PAC has called on banks to use technology better to return defrauded money to customers by locating “mule” accounts.
Martin Alderson, founder and chief executive at cyber security firm Codified Security, said there has been a worrying apathy in the financial services sector when it comes to the prevention of cyber crime.
He said: “The top tier banks are very good when it comes to their security. The likes of NatWest, Barclays and the rest of the big five are doing very well on that front.
“But when it comes to the second-tier banks and some of the financial tech companies they can really struggle with this.
“We have seen examples over the past 12 months where firms have had these vulnerabilities exposed and a great number of consumers have been affected.
“The hope has to be that, with cyber related crime the most common in England and Wales, people will finally wake up to what is a very serious problem and try and get ahead of the game on security.”
Stephen Jones, chief executive of UK Finance, said banks remain committed to preventing cyber crime.
He said: “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.”