Card fraud: are banks doing enough?

Most of us know at least one person who has been the victim of card fraud; many of us have ourselves been targeted. A quick straw poll of The Times Money team revealed that half of us have suffered at the hands of criminals in the past. Card fraud is endemic. Are banks doing enough to fight it?

On the surface, it appears that banks are winning the battle. In many cases, fraud victims have their bank to thank for querying an unusual payment and stopping the fraudsters in their tracks. In my own experience, when my bank queried a highly unusual attempt to spend £1,000 on mail order sportswear from Littlewoods using my card, I was relieved, grateful and stunned that it had acted so quickly.

But perhaps we should not be seduced into thinking that we are always protected from losing money.

The Financial Service Authority is paying increasing attention to how banks are managing the fraud threat, which indicates that not all of them are doing enough. The FSA has already said that smaller banks and building societies are the most vulnerable to fraud, since they do not have as much money to spend on sophisticated detection systems as bigger institutions.

However it seems the buck is increasingly being passed onto the cardholder to protect themselves. The watchdog says that we need to accept more responsibility, by taking better precautions to guard our card details and pin numbers and by checking our statements more regularly. That's all very well and good, bt worrying recent evidence from the Financial Ombudsman Service (FOS) that this is unlikely to solve the problem.

The FOS has reported that a growing number of cardholders are making compensation claims after their bank has refused to offer refunds for suspected fraudulent payments. This either suggests that the banks are right, and more and more people are crying wolf in the hope of some free money, or that banks are trying to cut their losses, an estimated £1.2 million a day, by denying refunds wherever there is sufficient doubt to give them an excuse not to pay out.

Have you been denied a refund? How well did your bank treat your fraud claim? Let us know below.

Comments

[Lynn]

All my son's money (£170) was taken out of his account. The cashpoint was in Brent and is Bank of Scotland. The fraud team say the card was not cloned because they got the pin number right first time. As it was, we were not in London the day it was taken out. We were in the Isle of Wight. (Excuse not to pay.)

[gareth]

My bank maintains that the phantom withdrawls must have been made by me as the chip was identified by the atm. So how is this possible ??? Is it possible that the chip can be cloned,can the atm be fooled or mislead in some way, is the fraud internal by a bank employee or is this just an excuse not to refund me???? please help

[Elizabeth Parr]

two amounts of £250 were taken from my account in dec and jan. i immediately phoned the Halifax. the lady i spoke to cross questioned me for approx 2 hrs, she clearly did not believe me. first i was told it was my card that was used, then said it was my husbands, intimating that he had withdrawn the cash without my knowledge. i explained that we had been married for fifty years, and he was not in the habit of removing cash at all.I was told that they would have to make further checks and would phone back the next morning. no call was forthcoming, so i phoned the again, and had to repeat the whole story to another person who then put me thro to the fraud dept,to have to repeat the story a third time. Finally i was told to reort it to the local police. this i did, they were most helpful, took all the details and provided a crime ref number .and asked if i required victim support. i phoned halifax on saturday (24th) spoke to the fraud dept and gave them the crime ref no, and again was croos questioned taking a further 25 min, by this time i was very upset, the outcome of this was that they would have to make further enquiries and would contact be again by tuesday. It is now thursday and i have not heard a word. Rather than the victim, i was treated as if i was being dishonest, which has been most upsetting, never before have be put in this situation, they could easily see from my financial record with the company,that i have no motive to act in this way.

[Jim]

From the card fraud article and ,coincidentally, also reading the article on security of wireless broadband, I have begun to wonder about the security of wireless credit card readers.

What is to stop criminals monitoring and recording the signals the wireless readers use to communicate? Are the readers data transmissions encrypted?

I've never seen any assurances about security of this type of card reader and wonder if, commonly restaurants, can assure customers of data security or have available an alternative reader. I suspect most have never considered this possibility. Perhaps they should.

[Claire Brennan]

My husband and I have been victims of card fraud twice within the space of two months: once on our current account with the Alliance & Leicester, and once on our Co-operative Bank credit card. While both banks were sympathetic, I felt that customer service could have been better in both cases. The A & L, for example, stopped our current account on a Sunday morning, and I didn't find out until Monday evening, after two unsuccessful attempts to use my card. Thankfully there were were no problems in terms of refunding the fraudulent transactions, but I was very surprised that the A & L made no attempt to phone either my husband or myself to tell us what was going on: a letter finally arrived on Wednesday asking us to make contact "urgently", because they'd stopped our current account! Obviously by that time we'd managed to work that out for ourselves: however, given that the A & L appeared to recognise the urgency of the situation, they might want to ask themselves if a letter is the most efficient and effective way they can find to communicate this to their customers.

We also had to declare the fradulent transactions twice, as despite returning the first declaration immediately, the A & L did not appear to have received this - probably not their fault, but just served to prolong the process. It was, of course, something of a shock to be subject to fraud of this kind, and I would have liked some sort of written confirmation from the A & L to say that the issue had been dealt with and concluded: four months later, I assume it has been, but at that stage, I would have appreciated a clear description of the process for dealing with cases like this.

The Co-operative Bank, on the other hand, did phone (on Christmas Eve) to tell us that they had identified fraudulent transactions totalling c. £1500 on our card. Despite a number of lengthy phone-calls with sympathetic staff, however, we are still waiting for a correct statement that does not include the fraudulent transactions, nor the interest incurred by these transactions. Most recently, when I asked for a correct statement to be issued to replace the incorrect one that we had just received, I was told that they could not do this and I would have to wait for the next statement to be issued. This means that, in order to avoid further interest charges, we have now made a payment based on an incorrect statement. It surprises me that the Co-operative Bank's systems appear to be inflexible to this extent, particularly in this set of circumstances.

It seems that banks and other financial institutions are on the ball in terms of spotting fraudulent transactions, for which I'm grateful. However, they might also wish to review their customer service in this respect, to make what is a traumatic experience as pain-free as possible.

[Joanna Blad]

My daughter had her Nationwide Flex Account card stolen whilst in Fiji last June. The account was in joint names Mother / daughter. Fortunately I was able to stop the card but not before over £700 of false transactions had taken place. Nationwide were efficient and very helpful. The £400 withdrawn from cash machines was refunded very quickly. We had to wait a bit longer for the remaining money which had been used to purchase goods was refunded while an investigation took place. All monies had been refunded within 6 weeks. Thank you Nationwide!

[Shirley Knowles]

My husband and I have had a joint account with the Bank of Scotland for housekeeping bills for about 20 years. During that time the debit card for that account has never been used at an ATM nor has it ever been used abroad. However, when my husband's card was used four times at an ATM in Bangkok over a period of two days, all the bank did was slap interest charges on the account. When I said that I would have expected these withdrawals to have been recognised as possibly fraudalent I was told that it happened too frequently for the bank to identify such cases! And I could see that by the routine way it was handled -the account was closed and another one opened, we were told to get a crime reference from the police and send it to the bank. At no time did we have to prove that we were not in Bangkok at the relevant - even though we could have done. We did get the money refunded and the interest charges removed after about 6 weeks but we decided to move our account anyway. We realised that the only place my husband's card could have been cloned was at the petrol station, so like so many others we now pay cash when filling up.

[David Biggs]

I have been the subject of card cloning twice in the last 3 months.
First, with a Morgan Stanley Credit Card and secondly with a Barclays Debit Card.
Morgan Stanley were by far the most supportive. In the Barclays case they have made me feel a suspect even though the fraud was committed in Australia where a replica card was made and used. In Australia they do not have chip and pin so the fraudulent purchases were made with the replica card and a signature.
I explained to Barclays that I have not been to Australia in the last 10 years but they then said "are you sure you haven't been to Australia recently?"

I'm happy to elaborate on these cases if you wish.

BTW, my credit has now been affected and I've been refused a card!

Regards
David Biggs