New anti-fraud measures: unintended consequences

eskbanker

RG2015 said:

The great flaw however is that the two parties responsible for the content, goal and implementation are the government and the banks.

One is driven by the desire to satisfy public opinion and hence earn votes at the next election. The other is solely driven by the desire to satisfy their shareholders, and make money. They will do as little as possible to comply with the legislation.

The financial well being of the public at large is a poor third in the priority list. Nevertheless, many will benefit from these measures, although not necessarily the most deserving of these.

Not sure that it's helpful to characterise the inherently conflicting motives of the various stakeholders as 'the great flaw', unless you're offering a better idea of how to organise things, i.e. what realistic alternative model wouldn't be flawed?  Are you perhaps favouring Marxism?

RG2015

eskbanker said:

RG2015 said:

The great flaw however is that the two parties responsible for the content, goal and implementation are the government and the banks.

One is driven by the desire to satisfy public opinion and hence earn votes at the next election. The other is solely driven by the desire to satisfy their shareholders, and make money. They will do as little as possible to comply with the legislation.

The financial well being of the public at large is a poor third in the priority list. Nevertheless, many will benefit from these measures, although not necessarily the most deserving of these.

Not sure that it's helpful to characterise the inherently conflicting motives of the various stakeholders as 'the great flaw', unless you're offering a better idea of how to organise things, i.e. what realistic alternative model wouldn't be flawed?  Are you perhaps favouring Marxism?

Perhaps I should have used some sort of caveat, such as that quoted by Mr Churchill in reference to democracy being the worst form of government, (apart from all the others).

My main point was the irony in seeing an excellent discussion on anti fraud methods, that were fundamentally flawed by the nature of the two main parties.

eskbanker

To use (part of) another old political quotation, you can't please all the people all the time, so it's inevitable that there's compromise involved in any attempt to reduce fraud, and the trade-off between security and convenience is never going to be resolved to all parties' satisfaction, especially when the population at large has such fragmented opinions on what should be done.

Personally I think the PSR is doing a reasonable job here - it's obviously not independent of government but its long-term projects don't seem to be unduly driven by short-term populist politicking, and I haven't yet seen any government ministers pontificating behind prominent 'Stop The Scams' lecterns....

trailingspouse

Just a quick question, which I hope isn't too off-topic. All of these anti-fraud checks etc etc seem to be aimed at online banking. If I was to go into my local branch (yes!! I still have an actual local branch!!) and make a transfer of a large amount from my current account to a savings account with the same bank, am I likely to come to any grief?

masonic

trailingspouse said:

Just a quick question, which I hope isn't too off-topic. All of these anti-fraud checks etc etc seem to be aimed at online banking. If I was to go into my local branch (yes!! I still have an actual local branch!!) and make a transfer of a large amount from my current account to a savings account with the same bank, am I likely to come to any grief?

Transfers between your own accounts at the same bank are out of scope of this issue as the bank knows you aren't sending the money to a fraudster.

born_again

boingy said:

The problem with all of this is that none of the banks will be taking on enough extra staff to minimise the inconvenience to customers. Co-op bank blocked a transfer and asked me to phone their fraud line and it took one hour and six minutes to get through to someone who then asked me a series of ridiculous questions that any scammer would breeze through. Examples:
Do you know where this payment is going to?
Is anyone forcing you to make this payment?
Are you any more stressed than normal? 

The stress question made me laugh - of course I'm stressed. My bank is blocking my payment and asking me lots of dumb questions!

These questions are the equivalent of an airport check-in desk asking you if you are a terrorist. I really don't believe they will have any real effect on reducing scams/frauds. I'm not sure where it will all end.

Daughter has a lovely job of auditing calls by the call center on the payments made.
The above attitude is very common, but they are the 1st customers to jump up & complain that they were not warned. Amazing how many simply hang up once rep has started to say the script. 

Should be a day delay between payment being requested & being sent. Would cut down on a lot of these  scams. The delay would have little affect on people transferring funds.
Giving COP, it could be made to exclude payments to a customers own accounts.

TheBanker

born_again said:

boingy said:

The problem with all of this is that none of the banks will be taking on enough extra staff to minimise the inconvenience to customers. Co-op bank blocked a transfer and asked me to phone their fraud line and it took one hour and six minutes to get through to someone who then asked me a series of ridiculous questions that any scammer would breeze through. Examples:
Do you know where this payment is going to?
Is anyone forcing you to make this payment?
Are you any more stressed than normal? 

The stress question made me laugh - of course I'm stressed. My bank is blocking my payment and asking me lots of dumb questions!

These questions are the equivalent of an airport check-in desk asking you if you are a terrorist. I really don't believe they will have any real effect on reducing scams/frauds. I'm not sure where it will all end.

Daughter has a lovely job of auditing calls by the call center on the payments made.
The above attitude is very common, but they are the 1st customers to jump up & complain that they were not warned. Amazing how many simply hang up once rep has started to say the script. 

Should be a day delay between payment being requested & being sent. Would cut down on a lot of these  scams. The delay would have little affect on people transferring funds.
Giving COP, it could be made to exclude payments to a customers own accounts.

Personally I'd have something a bit more sophisticated. A day's delay before paying a new payee. Once they've become a regular payee (maybe after a few payments/couple of weeks) the delay wouldn't be necessary.

And I agree, no delay needed if the transfer is to an account in the customer's own name and that's verified by COP. You could add further accounts to a 'whitelist' e.g. HMRC, credit card companies, registered solicitors' client accounts... So you end up only impacting people sending money to someone they've never paid before. Meanwhile the vast majority of payments can still go through quickly. 

eskbanker

TheBanker said:

born_again said:

boingy said:

The problem with all of this is that none of the banks will be taking on enough extra staff to minimise the inconvenience to customers. Co-op bank blocked a transfer and asked me to phone their fraud line and it took one hour and six minutes to get through to someone who then asked me a series of ridiculous questions that any scammer would breeze through. Examples:
Do you know where this payment is going to?
Is anyone forcing you to make this payment?
Are you any more stressed than normal? 

The stress question made me laugh - of course I'm stressed. My bank is blocking my payment and asking me lots of dumb questions!

These questions are the equivalent of an airport check-in desk asking you if you are a terrorist. I really don't believe they will have any real effect on reducing scams/frauds. I'm not sure where it will all end.

Daughter has a lovely job of auditing calls by the call center on the payments made.
The above attitude is very common, but they are the 1st customers to jump up & complain that they were not warned. Amazing how many simply hang up once rep has started to say the script. 

Should be a day delay between payment being requested & being sent. Would cut down on a lot of these  scams. The delay would have little affect on people transferring funds.
Giving COP, it could be made to exclude payments to a customers own accounts.

Personally I'd have something a bit more sophisticated. A day's delay before paying a new payee. Once they've become a regular payee (maybe after a few payments/couple of weeks) the delay wouldn't be necessary.

And I agree, no delay needed if the transfer is to an account in the customer's own name and that's verified by COP. You could add further accounts to a 'whitelist' e.g. HMRC, credit card companies, registered solicitors' client accounts... So you end up only impacting people sending money to someone they've never paid before. Meanwhile the vast majority of payments can still go through quickly. 

Not sure I'm following what's being suggested here - what exactly would happen during this proposed 24 hour delay that would significantly reduce fraud?  If there's something necessitating manual inspection of data and/or conversation with the sender, the overheads in doing so would be horrendous, but if it's just some sort of automated check then what would a delay add?

Just to quantify this, there were nearly 4 billion faster payments in the UK last year, and about 200K of these were assessed to be APP scam payments, i.e. about 0.005%, so how many of the 4 billion transactions would need to be intercepted and reviewed in real time in order to make serious inroads into the 200K?

boingy

The thing that annoys me is that the banks are targeting the wrong things and inconveniencing the wrong people. Every one of the payments that have been delayed for my wife and I were us moving money between accounts in our own name, some of which were not even new accounts. That's at the very low risk end of the scale. The explosion in scams/thefts has mainly been caused by the bad guys shoulder-surfing you to learn your password/pin then nicking your phone and emptying the account on the spot.  The defence against that is really easy - don't use your phone to bank in public. The other main scam is cold callers persuading you to either give them your security details or to transfer some money. I'm pretty sure none of these people go to the trouble of setting up a new account in your name to nick the money.

If the banks are going to continue using such a broad brush to slow these payments we might as well scrap faster payments and go back to chequebooks. 

masonic

boingy said:

The explosion in scams/thefts has mainly been caused by the bad guys shoulder-surfing you to learn your password/pin then nicking your phone and emptying the account on the spot.

The vast majority of frauds do not happen like this. The fraudster is never in physical proximity to the victim. They make contact via phone, email or social media and trick the victim into transferring the money.