With literally hundreds of thousands of people becoming the victim of card-based frauds involving credit or debit cards, the government has taken the extraordinary move of telling victims not to contact the police, but to go straight to their banks, instead.

Home Office Change of Tactic

This change of tactic has been approved by the Home Office in a bid to make the process of dealing with credit and debit card fraud, simpler and more effective. Despite the seeming commonsensical approach, many critics have said that this is a step towards privatising the justice system, adding that the government’s move towards encouraging the police to step away from dealing with certain types of fraud is simply not in line with the way that the justice system should operate.

The actual changes themselves were contained in the Fraud Act 2006, but were embedded in the small print and therefore went reasonably unnoticed – until recently. The number of fraudulent transactions that are part of this change in approach amounted to approximately £428 million per year. Consequently, there are concerns that this will simply allow both the government and the banks to sweep the issue under the carpet. Other potential fears have been raised in terms of the level of expertise that will now be available to investigate such fraudulent activity. With investigations now resting with the banking industry, much of the expertise that has been developed amongst the police forces will be lost. Significantly, it will be much harder to identify links with other crimes that may be associated with the fraudulent activity that is being dealt with by the police, with little or no knowledge as to what is going on by the banking investigators.

Furthermore, critics have argued that, by removing the police powers, this is in some way making the crime look less severe. However, the reality is that this type of crime is substantial, with more than 700,000 cases being reported, every year.

So, What Should Consumers Do?

Consumers who have found themselves in the position of having to go to the banks to deal with fraudulent activity may have been disappointed by the responses, with many saying that the banks were even aggressive towards the victims of these scams. In many cases, the victims have taken several weeks to get their money back from the banks and have had to escalate the matter to the police authorities, in order to get resolution.

Advice from the APACS

When discussing this issue, APACS (Association for Payment Clearing Services), which is the trade body that deals with card operations on behalf of the large banks, said:

“In most cases consumers will be required to report instances of this type of fraud straight to their bank or building society and not to the police. It will be up to the financial institution involved, and not the account holder, to pass details of the relevant crime on to the police”.

“This change in the way fraud is reported has come about after the introduction of the Fraud Act 2006 and follows discussions between the Home Office, Association of Chief Police Officers and the financial sector”.

“The aim is to reduce the level of bureaucracy involved in fraud recording and to streamline the reporting, recording and investigation of such frauds”.

It seems, therefore, that these changes are being met with mixed responses yet, in reality, only time will tell just how effective this shift has been and whether the banking industry itself will do better than the police have in recent years.