What's the old saying? "Make sure brain is engaged before putting mouth in gear." A British banker should have borne that in mind.
Banks are facing a furious reaction from customers after saying they should foot the compensation bill for fraud by paying a tax on every transaction made.
UK Finance chief Stephen Jones told MPs on the Treasury committee today that banks shouldn't always have to cover the costs when criminals con people into transferring money out of their accounts.
A tiny levy on each payment made in the UK could be a solution to covering the rising cost of such scam schemes, Mr Jones said.
. . .
The finance chief also warned against introducing a blanket requirement for banks to payout to victims.
He said that would 'attract more fraud into the system' by providing criminals with 'very very perverse incentives'.
Mr Jones' comments provoked an angry response from consumer groups and money experts who say it's the banks' role to protect their customers' money at all costs.
There's more at the link.
In one sense, of course, Mr. Jones is pointing out the obvious. It's already the case that banks will charge their customers enough to cover their operating expenses, even if those "expenses" include compensating customers for fraud. Customers simply aren't told why their charges are higher than they otherwise might have been. However, to come out publicly and suggest a levy or surcharge specifically to compensate for fraud or theft . . . let's just say that Mr. Jones doesn't appear to be the brightest bulb in the banking chandelier. How could such a suggestion do anything but make customers angry?
Another part of the problem is the sheer speed with which the modern international banking system functions. There have been numerous reports of money being fraudulently transferred from accounts in one country, to a bank on another continent, and from there to banks all over the world, including changes in currency, countries, time zones, whatever. It's very hard for investigators to follow the transfers quickly enough to prevent the money being withdrawn from wherever it ends up, particularly when the thieves have set things up beforehand and have accomplices standing by to get the cash in a hurry.
These two articles provide interesting information:
Victim of $440K wire fraud
can't blame bank for loss, judge rules
Food for thought.