Imagine the following scenario: A fraud hunter at the bank discovers that you, as a customer, want to transfer a large amount to a company. The bank finds little information about the company, and the transaction seems suspicious. The bank contacts you to tell you that this may be a fraud. You still choose to trust the company, with which you have made such good contact. You confirm the transfer to the bank. The money will be sent. Later you find out that the company was a scam. You have been deceived! What are you going to do? – As a consumer and bank customer, you know little about what kind of rules apply. You trust the bank, but in many cases the bank is not your friend, says lawyer Halvard H. Skarpmoen at Forbrukeradvokaten. Lawyer Halvard H. Skarpmoen is calling for simple and clear rules for what is the bank’s responsibility and what is the customer’s responsibility. Photo: Moment Studio His experience is that the customers most often seek advice from the bank when the rules are unclear. Then the issue of compensation and loss often ends up in the bank’s favour, says Skarpmoen. Do you think the responsibility is eased on the victims – It is a great strain to be exposed to fraud, and when you hear from the bank that it is your fault that you have been deceived, you often let the matter rest. This despite the fact that you have lost the savings you have earned through a long working life, says Skarpmoen. The lawyer receives support from researcher and research fellow Vebjørn Wold at the University of Oslo (UiO). He believes that fraud victims end up in a legally unclear situation when they “authorize” payments that later turn out to be fraud. – We have been given an “empty room”, where, in my view, there are not clear enough expectations for the banks, says Wold and continues: – We lack clear rules. What do the banks have a duty to stop, and what are they allowed to stop? This is unclear. UiO scholarship holder Vebjørn Wold is researching loss distribution in the event of fraud. Photo: University of Oslo The digital revolution has made bank customers more self-service than ever. Norwegian banks’ operating costs have fallen considerably due to mobile banking and other internet-based services. – Banks benefit from digitalisation. One must expect them to help protect customers’ deposits and take a greater part of the losses in the event of payment fraud, rather than “everything” being placed on the individual, says Wold. Norwegians are tricked into sending huge sums Scams where victims are socially manipulated into transferring money have become a very widespread problem. Norwegian bank customers lost at least NOK 468 million in this way in 2023, according to figures from the Norwegian Financial Supervisory Authority. The inspectorate points out that the victims themselves bear all or large parts of these losses. The sums are probably significantly larger than reported, since some fraud of this type is never reported Banks and other payment service providers reported in 2023 to have averted fraud attempts worth over NOK 2 billion. Digitization and automation have made Norwegian banks much more efficient. At the same time, new challenges have arisen. Photo: Kai Jæger Kristoffersen No industry practice In news’s case about the investment project The Gate Index, customers’ attempts to invest in some banks were stopped, while others let the payments go through after a warning. Rogaland Sparebank was one of the banks that stopped transactions from Norway to Cyprus in this case. Legal director Marie Eltervaag tells news that each individual bank decides how it works to prevent fraud. – Within fraud management, there are currently no industry practices that contain requirements for how preventive work should be carried out, says Eltervaag. The Supreme Court has also pointed out that there are no industry standards for fraud control at Norwegian banks. Lawyer Skarpmoen will advocate for such an industry standard. – We know that they have systems and that the alarm goes off, but what do the banks do with them? I am calling for the banks to take greater responsibility towards consumers, says Skarpmoen. In the UK, banks got new tools to stop fraudsters. Among other things, the banks are allowed to retain transactions for 72 hours to investigate possible fraud. Photo: Helle Westrum / news During the past few years, the banks have had to take a greater share of the responsibility for fraud without consent, for example card fraud. – Now we see that the fraud is moving, and that consumers are being tricked into consenting. But the banks have not taken responsibility for this type of fraud yet, says Skarpmoen. Finans Norge: Not an empty space Gry Nergård, director of consumer markets at Finans Norge, says that Norwegian banks have a great financial responsibility towards customers today. The banks have no financial interest in customers being defrauded, emphasizes Nergård. – That is why they have routines to detect suspicious transactions and contact the customers. I don’t know what an industry practice should add beyond this, she says. She believes that the banks already take a large part of the responsibility, also where customers are tricked into approving payments. Nergård therefore believes that Skarpmoen and Wold miss the mark. – The fact that you have to draw up in practice how to interpret “approved” can hardly be said to be the same as an empty room, replies the Finans Norge director. Gry Nergård, director of consumer markets at Finans Norge. Photo: Kari Nygard Tvilde She points out that the bank’s main task is to convey money that the customer wants to move. – And then the question is to what extent the bank must stop transactions that they are actually obliged to transfer to customers, says Nergård. – Is the current safety net at Norwegian banks good enough? – It will never be good enough, but it keeps getting better. Some banks have close to zero fraud, while others have less good systems. But fraudsters are constantly developing new methods, which means that we can never say that we are working “well enough”. Cathrine Warhuus, who leads the anti-fraud work of the consulting company KPMG in Norway, feels that the banks are preoccupied with the explosive increase in fraud and fraud. – Being the best at preventing fraud can be an important advantage in the competition for bank customers, says Warhuus. Cathrine Waarhus, director of the Forensic Services department at KPMG. Photo: KPMG She is supported by director Solfrid Haaskjold Brænd at KPMG Law. – You can twist the problem a bit. In the absence of an industry standard, it may be beneficial for a bank to offer a high degree of protection against fraud. This is something the Supreme Court also points to, says Brænd. Hello! Do you have input for us? Get in touch by phone, e-mail or Signal! You can also send us input, tips and information encrypted and secure via news’s extra secure notification reception – see how to submit via news’s SecureDrop here. Syed Ali Shahbaz Akhtar: 47241317 Magnus Ekeli Mullis: 47259210 Published 26.11.2024, at 15.59
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Researcher and lawyer believe banks do not take enough responsibility for fraud – news Rogaland – Local news, TV and radio
