UK Banks Covering up Cyber Crime Losses – City of London Police

A widely-held suspicion that UK banks are covering up the true scale of cybercrime has been confirmed by the City of London Police chief Adrian Leppard, who says that up to 80% of online crime goes unreported to the authorities.

Speaking at a Tech UK conference, Leppard says that the vast gap between what is reported and the actual threat level arises “primarily because banks are happy to write off incidents as costs, thereby costing the consumer collectively and funding ongoing cyber-criminality”.The Commissioner told the audience that the scale of the threat is much greater than the public think, so much so that it may have even surpassed what drugs have delivered to the criminal economy.He argues that the banks’ unwillingness to report the true extent of cybercrime, makes it harder to gain an accurate picture of the threat to the national economy and the resources required by police to counter the criminals.In November last year, a Treasury Select Committee hearing into cybercrime and fraud heard evidence from Dr Richard Clayton, a senior researcher in security economics at the University of Cambridge, who said that “insider” accounts of fraud losses at banks are double the numbers generally reported publicly.This followed a July Home Affairs Committee report on e-crime that accused British banks of letting cyber-crooks carry out crime in a ‘black hole’ of impunity by failing to report or investigate fraud.

Comments by Bill Trueman over this News:

We need to be very careful about articles like this, and comments like this too.

The issue here is about REPORTING not dealing with (investigating, prosecuting and deterring) the crime.

The real question here is, of the crimes that are reported to the authorities (i.e. the police), how many are investigated and how many are prosecuted and how many organised gangs identified and stopped and how many opportunists deterred. We can assume that the answer to these will be “almost ZERO %” on all counts.

I have sat with senior COL police people over many years (mainly in the 1990s) – who have refused to accept reports of fraud from banks, because they have no resources to investigate and prosecute. Accordingly £100 millions’s of card fraud ARE reported and not progressed, and £100 million’s of insurance fraud go the same way without even being reported – except for the MAJOR, MAJOR cases that are accepted by the police from the Insurance fraud bureau.

Try and get Leppard to accet such cases is nigh on impossible as only the top – fraction of 1% are progressed. And do not even start talking about or reporting to the police the Inland Revenue, Local Authority, NHS, Benefits etc. fraud because they won’t look there either.

In the UK, we are held up globally (mainly the banks) for the exceptional fraud collation and reporting on card and banking fraud and insurance fraud – and we were leading with the statistical collation of fraud as UKPLC. This was all done 20 years ago as a fall-out from the Levi Home Office reporting – and ‘wrapped up nicely’ except for the police investigation, and prosecution bit, which is still absent.

So it is easy, but also abhorrent that a police officer shoudl stand up and throw stones at an industry that has been doing its bit for a long time. The industry also funds the fraud reporting centre that HE RUNS as part of the COL police force – so it is actually a) Under his control and b) HIS issue too!

BUT…. lets look at what we are talking about here….. We are asked to believe that banks are “covering up Cybercrime”. What is this cybercrime? As far as the banks are involved, the banks lose money from criminals who are attacking the banks to obtain money through the abuse of the systems and processes. This is always how it has happenned and the banks are good at losing money in this way. Just because a new term started to be used 3-4 years ago – does not change the fraud position:

– Banks are attacked and lose money

– Some of it will always get misrecorded as bad-debt when the crooks have managed to con the banks that it was thus. The agreement with all parties has always been that this will not be considrered as fraud (Cybercrime) and will not get reported. The police adamantly refuse to accept such reports too – believeing that the banks have brought this upon themselves by lending money in the first place to these cybercriminals (Ironic eh?).

– Cybercrime / fraud losses are experienced, reported and not investigated.

It is OK to moan at the banks these days – for everything, and often they are to blame for a lot of their mistakes, but in this case we must be careful to spot that here we have a big policeman throwing stones from a very big greenhouse.

Perhaps we should start asking him a few big questions and stop this outrageous reporting. It is probably too that he was taken out of context in this reporting, as I am afraif that I cannot believe that a responsible policeman would be so stupid as to criticise his partner banks, his funding bodies and people who are patiently waiting for him to do his job rather than trying to do theirs.

Bill Trueman is Director of Riskskill(http://www.riskskill.com/)

 

Source News: http://www.finextra.com/news/fullstory.aspx?newsitemid=27226

Riskskill Appointed by Visa Inc. as an Approved GARS Reviewer

Riskskill has been approved as a trusted vendor for Visa Inc., and specifically as a Global Acquirer Risk Standards programme (GARS) reviewer. The Visa Inc. risk team monitor acquirer performance – i.e. organisations, often major banks, who process card transactions and other electronic payments for merchants. Riskskill will now assist such acquirers that want to demonstrate their compliance with applicable legislation and card scheme rules.

There are only a small number of similar approved vendors globally and most of these are based in California. With the addition of Riskskill on the Visa Inc. programme, there is now payment and risk management expertise available to acquirers in EMEA and around the globe, including across the wider USA.

Riskskill is a business advisory and management-consulting specialist, which focuses upon risk management practices and compliance within financial services and retail businesses.

The Riskskill team is heavily engaged in this part of the payments sector and has helped many acquirers (and large merchants) to review and grow their business in the right way with strong risk and exposure controls.

Visa Inc, proposes that acquirers engage a Visa-approved reviewer such as Riskskill to carry out a GARS review. They will then work on-site with management and teams at an acquirer to look at current practices and procedures to identify business improvements.

Within a GARS review, Riskskill advises on all aspects of the merchant acquiring business, including merchant and third-party partner/agent recruitment and management, underwriting and sales policy and practice; agreements and contracts; settlement operations and procedures; portfolio quality, ongoing merchant management and monitoring; merchant closure and termination; fraud, chargebacks and compliance programmes; merchant training; and data/systems security.

Kevin Smith, who manages the acquirer GARS practice at Riskskill commented that: “With a deep knowledge of the payments business and risk management requirements, the team at Riskskill look forward to working closely with more acquirers that want to improve their acquiring performance and be able to independently demonstrate this to other organisations such as Visa Inc. We are delighted that Visa Inc. recognises the skills and expertise at Riskskills, and our capabilities in global risk management.”

About Riskskill (www.riskskill.com)

Riskskill is a leading Europe-based risk management consultancy, with an impressive international track record of eliminating the risk of losses, reducing risks and exposures, and working with clients to put in place strategies and programmes of work to remove or prevent losses, regulatory issues and other fraud or bad-debt and compliance problems. Its people are widely accepted as some of Europe’s leading risk and fraud experts and they are frequent commentators on the issues involved. The key team have a wide experience in banking, insurance and the financial services and payments sectors and are thought leaders at the forefront of many industry wide and international debates.

Riskskill(http://www.riskskill.com/) is just one of only six organisations globally that have been confirmed as qualified and approved to complete GARS Reviews for Visa Inc.

For further information, contact:  Bill Trueman or Kevin Smith at Riskskill.com
enquiries@riskskill.com
or
Leigh Richards, The Right Image PR, 0844 561 7586 – leigh.richards@therightimage.co.uk

Read the full story here: http://www.pr.com/press-release/614755