Treasury Select Committee seeks to crack down on Bankís lack of transparency regarding fraud levels
Andrew Tyrie, MP and chairman of the Treasury select committee, has taken decisive action against banks on the back of testimony highlighting the way in which the UKís biggest 5 lenders present their figures belies the extent of fraudulence within the banking sector.
Tyrie, charged with ensuring corporate giants adhere to financial legislature, has written to Santander, Barclays, HSBC, Lloyds and RBS requesting that they disclose their data collecting practices whilst stressing the need for greater transparency in their conduct.
Although Tyre recognised that banks could be hesitant to release their internal data on fraud as this could be used by the perpetrators to further their own fraudulent ambitions, he stated that consumers are entitled to the whole picture regarding funds being snatched from their accounts in order to understand the extent of the threat facing them and act with appropriate diligence in response.
Mr Tyrie stated: ìAny data on fraud levels published by the industry should be as comprehensive as possible.
ìThe public should be given the best possible information about the risk of fraud, as well as how to avoid it. Banks must be as open as possible with consumers about what this information does and does not cover".
Richard Clayton, a leading security research at Cambridge University, explained to the treasury select committee last month that banks are wary of sparking mass bewilderment amongst their clientele by publishing the full extent of fraud, the end result being consumers not knowing just how much access fraudsters have to accounts.
ìWe know the scale of lots of fraud, particularly that touching consumers, because the banks collate this information and break it down by different sorts of fraud, whether or not cards have been lost in the post, whether or not it is ëcard not presentí fraud, whether or not it is online banking fraud, and they publish the figures for how much money is lost, as in they have to recompense consumers for that amountî: Clayton stated
ìInsiders tell me that the going rate is about twice that amount of money goes walkies out of peopleís accounts.î
However, Clayton did note that banks are adept in the returning of funds to consumers whoíve fallen foul of fraudsters.
Andrew Tyrie harnesses a fearsome reputation amongst lenders having grilled numerous bank directors over issues of conduct, whilst also pushing for regulators to be able to break up leading banks in cases of severe wrongdoing.
Last month, he backed Mark Carneyís, governor of the Bank of England, proposed amendments aimed at capping bankersí salaries which have been spiralling in recent timers.
He said: "The Governor has acknowledged that full implementation of a number of the fundamental reforms proposed by the banking commission is essentialóa regulatory and supervisory framework strong enough to ensure that senior individuals can be held to account, remuneration structures that adequately align risk and reward, and reforms to address 'too big to fail' and the implicit taxpayer subsidy.î
"The Governor has also agreed with the banking commission that the EU's crude bonus cap has the absurd and counterproductive consequence of limiting the scope for remuneration to be cut back. It is a fundamentally flawed tool that may serve only to push up fixed pay.
"As the banking commission said eighteen months ago, improving standards in banking is a big job. There's a lot more to do. The Bank of England, as well as the Financial Conduct Authority and the banks themselves, have crucial work ahead in implementing the banking commission's reforms."
His latest correspondence, targeted at the synthesis of greater transparency in banks & consumer relationships, will no doubt spark consternation amongst the ëbig 5 lendersí.
Tyrie wrote in his letter to Britainís biggest lenders: ëThe committee was told last month that the amount of fraud reported by banks may substantially understate the true scale of the problem. It would be extremely concerning were this to be the case. The public should be given the best possible information about the risk of fraud.í