The insecurity of fraud victims in the fight against cyber-assailants

More than one in four UK bank customers has to go out of their way to report fraud to their providers. What’s more, the most common way that customers were first alerted to any fraud on their account, building society or credit card account(s) was when they personally saw a suspicious transaction/activity via online banking. This was among the findings of recent research nationally by Censuswide, commissioned by Aspect Software, which took the views of 500 victims of banking fraud in the 12-month period to April 2017.

Earlier this week Royal Bank of Scotland (RBS) chief executive, Ross McEwan, blamed “careless” fraud victims for too often causing devastating losses of money. Bank customers “can’t keep blaming this on an organisation where customers don’t take their own duty of care as well,” said McEwan. “When people are passing their iPads or laptops over with their passwords and the like, there’s got to be a care here, otherwise this will just become a major issue for all and the cost will pass through.”

This attitude is echoed by the survey findings, which reveal that one in nine respondents felt that their provider treated them more like the criminal than the victim despite any other measure the bank might have. Ultimately, trust in banks is dented as customers feel that they should not be held accountable for attacks on their personal finance.

Victim blaming damages customers’ confidence

There are a small number of instances of fraud where victims feel that they aren’t getting the service they expect, with the bank leaving it down to the customer to flag if something goes wrong, which again is a nod to McEwan’s attitude towards banking customers. According to the research, in one in five instances the customer claims they first became aware there was fraud on their account when their card was blocked from making transactions or was declined. This causes considerable undue stress for customers as they are stopped from making a purchase and worse, embarrassed at being unable to pay.

After this, many victims of fraud have to go through the major inconvenience of lengthy claim processes. No one likes filling out forms, especially when they’ve been through something distressing. In nearly half the cases (47%) although the banking provider immediately arranged for a new card to be sent to the victim, he/she then had to rely on the slow postal system for delivery and were left without access to cash for between three and five working days.

In 9% of fraud instances over the past year customers were left without access to any money until their replacement card arrived, which forced them to resort to borrowing from friends and family (8% of times according to the research). This can prove humiliating for the fraud victim and also extend money troubles to other people in their circles.

“Block now, worry later”

There is clearly a challenge where a number of banks and credit card providers are not equipped to deal with these fast-paced fraud situations. They are faced with an obligation to look after a customer and make banking easy and convenient, but also to invest in effective measures to identify, prevent and resolve fraud and criminal activity. In the bank fraud report, the younger generation (16-24 year olds) would choose usability in mobile banking over security. On the other hand, those over the age of 55 wanted the highest possible level of security, rating it above ease of functionality.

Younger customers don’t want to feel constricted if they are victims of fraud, but those who are older might well feel that these restrictions are completely necessary for the protection of assets. Banks may vary in their approach to dealing with fraud and crime, with some using sophisticated technology to monitor account behaviour and flag unusual activity. This often results in an immediate block on access to customers’ accounts – until they can verify the activity in question. The go-to fast-paced method of fraud prevention for banks seems to be “block now, worry later”. Of course, customers are going to want fraudsters stopped at the earliest opportunity, but it seems that this has to be at the cost of their own freedom.

Technology to fight cyber crime

Pointing fingers, and victim blaming won’t solve the real issue at hand. The use of mobile phones for finance has made it possible to leverage openly available mobile data to verify users with something as simple as a short, automated call. This can identify and flag suspicious activity such as SIM Swap and call divert. Security doesn’t have to be taxing, it can be unnoticeable to the customer and offer multi-factor authentication at the same time avoiding fraudster’s access to accounts and avoiding any money loss from customers and banks.

People log into mobile banking apps more than 11m times a day in the UK alone. We choose to manage our money via a device because we expect flexible, speedy digital banking that’s so easy it has become second nature, so why are we still behind when it comes to fraud? If mobile can make money management easy, frictionless and convenient, why can’t it for security by verifying identity and noticing attacks before they can take hold?

86 views

Related reading

Tags: banking | fraud | UK