Customers to fight for compensation

Banks Take Less Blame for Online Crime

30-April-2008, Writes Dan Drage dan.drage@consumerchoices.co.uk

A significant outcome from the OFT test case could be the level of liability banks are prepared to accept for online identity theft.

New rules added to the banking code, designed to absorb the impact of a high court loss in the overdraft fees test case, signal less willingness on behalf of the banks to cover losses.

The revised code, which came into practice three weeks ago, states customers must have up to date antivirus and anti-spyware software installed on their computer if they’re to successfully claim compensation after becoming victims of online fraud. Additionally, a personal firewall is also required.

Cases involving fraudsters ‘phishing’ for bank details have tripled over the last year. Apacs, the UK payments authority, says that there were 10,235 reported cases of this type of criminal activity in the first three months of the year, against 3,394 in the first quarter of last year.

Until now, banks and building societies have covered almost all losses caused by internet fraud, even when adequate protection was not in place. Banks maintain they will continue to review individual cases on their own merits.

Tim Pie of HSBC (www.hsbc.co.uk) bank had the following to say:

‘Customers do have a responsibility to take reasonable steps to protect themselves against fraud. The Banking Code now gives guidance on what those reasonable measures are.’

Chris Eagle, Commercial Manager at Credit Choices, has the following advice for internet bankers:

‘As a bare minimum, you will need the following products to cover yourself should you become a victim of online crime: Firewall, Antivirus software, Anti-Spyware software. Additionally, always look for a padlock in the bottom right hand corner of your browser when shopping online, and remember legitimate banks will never mail you and ask for banking details.’