Faster bank transfers could mean increase risk of fraud
June 22, 2008
Fears have been raised over the new faster bank transfer system that was launched earlier this week, with some officials claiming that the system could put consumers at increased risk of becoming victims of fraud. The new system means that the clearing period on one off transactions made by phone or online will be reduced from three days to a matter of just hours.
However, security officials are concerned that the faster transfer periods that have come into play mean that banks and financial institutions will now have far less time to pick up on any suspicious transactions or activity, and this could increase the risk of becoming a victim of financial fraud. In fact, officials have said that savvy fraudsters with adequate details could actually make a number of transactions before the banks realised that there was anything unusual going on.
One security official stated: ‘The Faster Payment system will be a challenge for banks which could lead to increased risk of fraud, as it will be harder for banks to detect and block fraud in the time window available. The existing process relies, in part, on banks having sufficient time to detect suspicious transactions.’ He went on to state: ‘With more than 20million customers regularly using internet banking, increasing online safety is clearly a priority.’
At present the new system covers just 5% of payments, but by August this is expected to rise to around 50% of payments. By the end of this year it is thought that practically all payments will be going through the new, faster system. Officials from APACS recently warned: ‘As with any payment system there is no room for error as it will be an integral part of the UK’s economic infrastructure.’
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