Banks accused of failing to report true scale of cybercrime

Banks accused of failing to report true scale of cybercrime

Treasury Committee chairman Andrew Tyrie is to question banks over allegations that they may be under-reporting instances of bank fraud because they don't want to frighten people.

Tyrie made his comments following a Treasury Select Committee hearing into cybercrime and fraud held as part of its inquiry into the 'Treatment of Financial Services Consumers'.

The Committee heard evidence from Dr Richard Clayton, a senior researcher in security economics at the University of Cambridge, who said that banks are reluctant to report the true extent of cybercrime for fear of spooking customers.

He told the Committee that "insider" accounts of fraud losses are double the numbers generally reported publicly.

In a statement following the hearing, Tyrie said that he would raise the issue with banks and regulators.

“The Committee today heard that the amount of fraud reported by banks may substantially understate the true scale of the problem. This is concerning," he said. “I will be writing to the banks and regulators to obtain a fuller picture on this issue.”

In July last year, a Home Affairs Committee report on e-crime accused British banks of letting cyber-crooks carry out crime in a 'black hole' of impunity by failing to report or investigate fraud.

Comments: (4)

A Finextra member
A Finextra member 07 November, 2014, 15:54Be the first to give this comment the thumbs up 0 likes

It's interesting to me that the government would be bold enough to criticize a policy that they have a deep interest in maintaining.  How many of the threats to the nation do we actually hear of? 

A Finextra member
A Finextra member 07 November, 2014, 20:30Be the first to give this comment the thumbs up 0 likes

The policy in Europe is different. In many countries banks must report cyber incidents and under-reporting is illegal. The coming EU Data Protection Reform will take it even further: A massive data breach will be fined heavily -in the billions area for global companies. In that environment bankers will report - or go to jail. The logic behind this is that transparency helps others improve. Thumbs up from a security persepective!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 November, 2014, 16:19Be the first to give this comment the thumbs up 0 likes

Banks must be under the impression that their customers think "ignore is bliss". Well, personally, they're not wrong:) As a bank customer, I want to know about a breach not when it happens but only if - and that's a big IF - someone has actually used the breached info to steal money from my account. And, when my bank informs me about that, I want it to tell me that it has already reversed the fraudulent charge, that I need to do nothing and that all's well. Maybe it's only me or maybe I'm representative of the average customer. 

A Finextra member
A Finextra member 10 November, 2014, 03:05Be the first to give this comment the thumbs up 0 likes Money laundering .... Cyber laundering .... Eventually everything will come out in the wash ... Reputations and Brand names are at stake .... There are risking by hiding facts if this is truly the case ....
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