British banks under fire for under-reporting fraud

HM Treasury

British banks could be reluctant to report the true extent of cybercrime for fear of spooking customers, a Treasury Select Committee heard.

The Committee held a hearing into cybercrime and fraud held as part of its inquiry into the ‘Treatment of Financial Services Consumers’.

Evidence of these allegations came from Dr Richard Clayton, a senior researcher in security economics at the University of Cambridge, who said “insider” accounts of fraud losses are double the numbers generally reported publicly.

In a statement following the hearing, Treasury Committee Chairman Andrew Tyrie said that he would raise the issue with banks and regulators.

“The Committee today heard that the amount of fraud reported by banks may substantially understate the true scale of the problem. This is concerning,” he said. “I will be writing to the banks and regulators to obtain a fuller picture on this issue.”

A Home affairs Committee report on e-crime in July last year has already accused British banks of letting cyber-crooks carry out crime in a ‘black hole’ of impunity by failing to report or investigate fraud.