The Aussie Securities and Investment Commission (ASIC) wants to hold banks, telcos and social media liable to reimburse people who lose money through scams.
There is a very interesting argument developing in the British financial services sector at the moment, an argument that is being watched around the world wherever “authorised push payment” (APP) fraud is escalating to crisis levels (eg, Australia, where consumers lost a record amount of more than three billion dollars to scams last year). The British banks have been pushed into signing up for something called the “Contingent Reimbursement Model” (CRM) which means, essentially, that if you send money to fraudsters, the bank has to give your money back. This is unsustainable and it cannot be remedied without action on digital identity.
Just as in the US, where Zelle fraud is becoming a very serious problem, UK bank customers are losing enormous sums of money to fraudsters who trick them into sending money via instant payments. The UK’s Payment Systems Regulator (PSR PSR ) is making banks responsible for the losses that customers suffer when they fall victim to these kinds of scams. There are some constraints. Customers will be expected to heed warnings from their bank about likely scam attempts, inform their bank within 13 months of the last fraudulent payment and furnish the bank with information for assessing a reimbursement claim. The regulator says that if a customer has been « grossly negligent » then they may not be reimbursed.
That may not sound unreasonable, but the regulators has said that this will be a high bar that will only apply in a small minority of cases and that it will « never apply where a victim’s vulnerability is a factor” in the fraud. So if a bank calls a customer to tell them that they are being scammed and blocks the transfer, but the customer insists that the transfer go ahead, then the bank will still have to pay up
(This will, by the way, have the entirely expected consequence of encouraging banks to close the accounts of vulnerable customers, a process that appears underway.
