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How the Banking Protocol is tackling fraud

The finance industry is seeking ways of tackling financial crime on several levels, says Katy Worobec, managing director, Economic Crime, UK Finance

The Banking Protocol – a joint partnership between the banking and finance industry and police forces across the UK – was introduced in October 2016 with the aim of protecting vulnerable people falling victim to fraud, by putting measures in place within bank branches to identify potential cases of wrongdoing.

Developed by UK Finance in partnership with National Trading Standards, the initial pilot of the ground-breaking scheme took place in London and resulted in bank staff making 178 calls to police, leading to 16 arrests. The Banking Protocol started its rollout nationwide in March 2017 and is now supported in all 45 police forces across the UK.

Since then the initiative has been widely adopted as a key part of the work that the industry is doing to tackle fraud against consumers, with hugely positive results. The latest figures show that the Banking Protocol prevented potential fraud victims from losing £38 million in 2018 and led to 231 arrests. Over 4000 emergency calls were reported last year, with an average of £8,960 being prevented from being lost per call.

Banks are invariably a key staging point for cash withdrawal fraud. Customer-facing bank staff are trained to identify signs that a vulnerable customer may be about to fall victim to fraud, stop the transaction and request an immediate police response to the branch using an agreed password. It may be that the transaction seems out of character, or is one the customer appears visibly uncomfortable with.

Customers at risk tend to be the most vulnerable; not only the elderly or the lonely, but also young and impressionable people coaxed into acting as ‘money mules’.

Collaborative partnership

The industry is well aware that frequent changes in the tactics criminal gangs use mean that it needs to remain vigilant and be adaptable. The Banking Protocol provides a joined-up approach to protecting citizens across the UK from scams, by establishing a collaborative partnership between policing and the private sector to root out the sources of economic crime with new and innovative solutions.

In one case, an elderly customer visited a bank branch in Stowmarket to withdraw £19,000 which they claimed to urgently need. After some sensitive questioning in a private room, it emerged that the customer was the victim of a fraudster claiming to be from HMRC, insisting they pay an urgent tax bill or risk being sent to jail. Fortunately, the scam was stopped thanks to the Banking Protocol, and the customer was prevented from losing a potentially life-changing sum of money.

By providing a standardised, rapid-response method of identifying, stopping and reporting fraud issues, the Banking Protocol has enabled the police to prioritise responses and has allowed fraud victims to be provided with consistent support.

Customers affected are given extra support, advice and assistance to help prevent them becoming a victim of future attacks, including social services and additional checks on their future transactions. The Banking Protocol is a great example of how close cooperation with law enforcement can better protect vulnerable people from becoming victims of economic crime.

 What comes next?

Millions are being invested in new ways to track stolen funds, provide support for law enforcement to combat organised fraud, and develop advanced security systems which prevented £705.7 million of unauthorised fraud in the first half of 2018 – equivalent to £2 in every £3. There are a number of key areas of focus for the banking and finance industry and these include:

Suspicious Activity Reports: The finance industry is hosting and part-funding the government-led programme to reform the system of economic crime information-sharing to meet the needs of crime agencies, regulators, consumers and businesses.

Confirmation of Payee: Pay.UK is providing the rules and governance for Confirmation of Payee. This is an account name checking service for retail payments to help prevent authorised push payments (APP) scams.

Voluntary Code for APP scams: The aim of the Voluntary Code is to set out clear requirements for payment service providers to follow when processing a claim following an APP scam, with guidelines on consumer protection and the principles for reimbursement.

The finance and banking industry remains committed to new and innovative ways to tackle authorised and unauthorised fraud and crack down on criminal gangs. The Banking Protocol has been a significant step forward and is a crucial part of its current approach.

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