Banks' role in reporting e-crime raises concerns

New system could lead to under-reporting, experts say

Hodge: New system will be more efficient

Industry experts have criticised new procedures that make banks the first point of contact for reporting online fraud.

From this week, businesses and consumers in England, Wales and Northern Ireland have to report instances of online, cheque and card fraud to their bank or building society instead of the police.

Jim Norton, senior policy adviser at the Institute of Directors, says the reporting function should always lie with the police.

‘This is a retrograde step and the result of the fact that we haven’t properly resourced the police so that they can deal with e-crime,’ he said.

‘The National Hi-Tech Crime Unit has disappeared and not been properly replaced, and the Home Office has nothing better so they are going to allow the banks do it.’

Sandra Quinn, director of communications at banking body Apacs, says the new process will provide a more realistic picture of the scale of e-crime.

‘This change removes an additional level of reporting and will provide greater consistency for the reporting of fraud losses in the UK,’ she said.

Until this week victims have reported e-crimes to their bank, then the police, and often then have to go back to their bank to pass on details given to them by the police.

Crossbench peer the Earl of Erroll believes the scale of e-crime could be masked by banks.

‘The banks don’t want to scare customers, so surely they have a vested interest in not reporting it to the police and trying to play down the risks,’ he said.

But DTI minister Margaret Hodge says the new reporting system will enable more crimes to be efficiently dealt with.

‘One problem is that if people do go to the police they don’t get a response,’ she said.