Treasury Committee calls for bank action on COP and financial crime prevention

The Treasury Committee has published its response to the second strand of the Economic Crime enquiry, looking at the effects of financial crime on consumers.  The report focuses on authorised and unauthorised payment fraud. The report:

  • notes the growing scale of economic crime, and calls for FCA to publish data within six months in order to keep abreast of the amounts in issue;
  • says the Committee is disappointed the Government has not been listening to calls for financial institutions to be better able to share data, and is pleased a public-private working group has now been set up, and the Committee calls on it to report every six months on progress, and to work towards proposing appropriate amendments to data protection legislation;
  • notes concerns at the time sometimes taken to freeze accounts once misuse has been suspected;
  • calls for the urgent introduction of confirmation of payee, and criticises banks for having asked for similar information but not having used it before now,and noting the importance of the system being able to flag spelling errors;
  • recommends introducing a 24 hour mandatory delay on first-time payments, to enable customers who are being defrauded to remove themselves from the high-pressure environment in which they are being manipulated;
  • calls for more education about money mules;
  • wants transparency from banks about reasons for “de-risking”;
  • notes the new initiatives to improve police response times to fraud reports, and how the government resources complex fraud investigations;
  • recommends that all frauds be reported by banks, even where they have reimbursed the customer;
  • calls for clarity in the process for reporting economic fraud so consumers know who to contact;
  • strongly advises that the Contingent Model Reimbursement Code should be mandatory – and recommends a review of whether refusing reimbursement on the basis of payee name match is fair; and
  • stresses the need for an agreed definition of what is “gross negligence” on a customer’s part for the purposes of the PSRs.



Emma Radmore