When it comes to financial fraud, the banking sector is always playing catch-up with the increasing sophistication of criminals.
Banks are now much harder to hack, but fraudsters are turning their focus to their big customer bases to try to make a fast buck.
This may involve tricking customers into sending the fraudsters’ money directly, often through the “safe account” approach.
Ashley Hart, head of fraud at TSB, explains: “Someone calls the customer pretending to be the police or the bank and tells them their account is under threat and that they have to move money into another account – which is, of course, the fraudster’s account.
“We are also seeing lots more attempts to recruit money mules, who – largely unwittingly – allow money from fraud to go into their account and then send it on somewhere else. This is money laundering, which can carry a prison sentence of 14 years. Lots of those being tricked into this are students, either by people in the street or through job scams, where they are recruited as a ‘payment processing agent’ or similar role and unknowingly pass on the proceeds of fraud.”
TSB is the first UK bank to offer a fraud refund guarantee. Introduced in April, it means TSB’s 5.2 million customers are refunded in full if they fall victim to a scam. “This is transformational for the industry and its customers,” says Hart. “Scams were much easier to detect in the past but fraudsters are much more sophisticated now. This means it is harder and harder for the average customer to protect themselves from being scammed – so TSB decided it would no longer let innocent victims be left out of pocket by a fraud.”
Hart says customers value the new service, and as well as the bank stepping in to make up losses, it has forged a positive new partnership between TSB and its customers. “They will share information about the fraud with us – like a dodgy e-mail – and we can pass that to the police. It’s not the customer fighting with the bank to be compensated; it’s a true partnership.”
TSB aims to embed its approach at community level by working with schools, hospitals, care homes and charities as part of a “Protect, Prevent, Pursue” approach.
“It’s really important to work with customers and communities – and the rest of the industry and the police,” says Hart.
“Fraudsters will always try new things and look to be one step ahead – and only through partnership can we keep up.”