FCA calls for “robust frameworks” to detect fraud and support victims
The UK’s Financial Conduct Authority (FCA) has called for stronger anti-fraud systems and better customer support for fraud victims in its latest review.
The FCA calls on firms to strengthen anti-fraud systems
The regulator recently published key findings from its review of how firms tackle fraud, including authorised push payment (APP) fraud, and how they handle complaints from customers.
While it says it found “examples of good practice”, it also shares the regulator’s disappointment “with the way some firms supported customers who were the victims of fraud”.
The review, which consisted of a mixed risk-based sample of 12 current account providers, challenger banks and payment firms, highlights that all payment service providers (PSPs) should regularly evaluate how they identify and prevent fraud.
It alleges firms of “poor complaint handling” by taking either too long to respond, or providing letters to customers that were “sometimes unclear, confusing, or included unhelpful and, on occasion, accusatory language”. When making decisions about fraud claims and complaints, the FCA notes that companies were not “fully considering characteristics of customer vulnerability”.
According to UK Finance’s 2023 half year fraud update, losses due to APP scams amounted to £239.3 million in the first six months of this year, affecting more than 116,000 people, which it says could be an underestimate with 86% of fraud instances going unreported, according to the National Crime Agency.
“With more people potentially vulnerable due to cost-of-living pressures, and fraud methods evolving, it is critical that firms continually evaluate their approach and have robust frameworks in place to detect fraud, as well as effective support for victims when it happens,” the regulator says.
The FCA adds that while it is working with the firms in its review to strengthen their systems, it hopes all PSPs utilise the information from its findings to reduce fraud losses and improve customer treatment and complaint handling in line with the Consumer Duty.
