/financial crime

News and resources on financial crime, including fraud, scams, Anti Money Laundering and Know Your Customer.

Discussion
Lloyds, Santander, Barclays, TSB demand Google, Facebook reimburse online fraud victims
Ketharaman Swaminathan

Ketharaman Swaminathan

  I'd once raised the question of liability of TELCO, Power Utility, et al in APP Scams. Not sure whether banks were inspired by my thoughts or whatever but I totally endorse their going after other parties that are equaly involved in APP Scam. Automobile company can't be held liable for selling the robbery getaway car. Payee bank can't be held liable for opening the alleged scammer's account. KYC is not Character Certificate. Banks can't deny accounts even to convicted scammers. How can they be expected to deny account to alleged scammer? Payor is totally responsible for APP Scam, particularly if s/he ignored a Confirmation of Payee red flag while initiating the payment. Of course, depending on their jurisdiction, they might be eligible to seek redress from law enforcement.
Lloyds, Santander, Barclays, TSB demand Google, Facebook reimburse online fraud victims
Jeremy Light

Jeremy Light

  The principle of "polluter pays" should apply also to the banks who allow fraudsters to operate fraudulent bank accounts to collect the funds they scam. I keep on repeating this and I am amazed at how little visible action is taken by the banks and the regulator to address this issue head on. When fraud using bank transfers is committed the account the stolen funds are sent to is always known as are any accounts the funds are then forwarded to. It is equivalent to always knowing the registration details of the getaway car in a robbery and all subsequent getaway cars the criminals use - but doing little with the information. Innocent victims need to be reimbursed and the platforms that facilitate the scams have a duty to prevent them - but banks need to do more to prevent fraudulent account openings and account takeovers and do more to recognise and trace fraudulent payments flows into and out of their accounts. It is also bizarre that confirmation-of-payee is used by (some) banks to alert payers if the beneficiary name they think they are paying is different to the account name, a red flag for potential APP fraud, but the receiving bank is under no obligation to do the same, very simple check for incoming payments, again a red flag that the account may be fraudulent if the names are different.
Firms failing to monitor social messaging
A Finextra Member

A Finextra member

  I won't say what foreign owned bank I worked for where piles of messaging was not being monitored - essentially because post implementation of a tool, no one followed up to keep up monitoring.  And that was just one type of messaging.  I'd gone to my 'mangler' and warned him - he told me to leave him alone.  Then internal auditors asked him the status - and suddenly it became a top priority.  But that was just one of many platforms.  Others were ignored. I cared about this for a number of reasons - one of them is that another firm I'd worked for was part of the LIBOR scandal.  At that firm, there were rules, including about cell phones on the trading floors, that at a certain point were no longer enforced.  Compliance on all sorts of things is a joke in numerous firms until, if and when these firms get hit with audits.
AN INTRODUCTION TO CHARGEBACKS: THE EVOLUTION OF THE CHARGEBACK PROCESS
Ketharaman Swaminathan

Ketharaman Swaminathan

  Nice post but I totally disagree with the suggestion that credit card chargeback should be scrapped. Instead, the industry has responded by introducing A2A RTP as a competing method of payment which does not have chargeback provision, lower MDR, so it's pro merchant as against credit card which is pro consumer. India's A2A RTP is very popular. USA's A2A RTP Zelle is gaining traction.