Now customers will know where their money is safest as banks face hotel-style star ratings system over fraud
- Government to impose ratings on banks in an effort to shame those lax on fraud
- Industry bodies claim ratings would be misleading and exploited by criminals
- Campaigners insist the plan is vital to tackle £10 billion-a-year online crimewave
The Government is set to impose hotel-style star ratings on banks in an effort to shame those that are lax on fraud.
The radical proposals would tell customers where their money is likely to be safest – but they are being fiercely opposed by the financial giants.
Industry bodies claim that any rating would be misleading, may be exploited by criminals and would discourage institutions from coming clean about fraud.
The Government wants to impose hotel-style star ratings on banks to shame those lax on fraud
But campaigners insist the plan is vital to tackle a £10 billion-a-year online crimewave. Nearly five million offences a year are committed in England and Wales.
Liberal Democrat MP Layla Moran, who sits on the Public Accounts Committee, said: ‘We deserve to know which banks deal with fraud effectively so that we can make informed choices about who we trust our money to.’
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She added that similar schemes in other sectors ‘led to a race to the top in terms of security’.
In a letter seen by The Mail on Sunday, the Home Office’s top civil servant, Sir Philip Rutnam, told MPs that a star rating system would help ‘raise standards across the board’.
But the move could lead to a showdown with the banking sector.
Liberal Democrat MP Layla Moran backs the idea
A spokesman for industry body UK Finance said: ‘Publishing individual banks’ data would not provide an accurate picture for customers of the relative performance of different banks and would instead provide information that could be exploited by fraudsters to identify vulnerabilities.’
Fraud prevention service Cifas agreed, adding that the system would have an impact on ‘legitimate fraud reporting, signpost security weaknesses to fraudsters and create an anti-competitive market’.
However, Harry Rose, editor of Which? Money, said the scheme would help customers.
He added: ‘We welcome any initiative that helps people to make more informed choices about where they bank.’
The ratings would be issued by the Home Office based on fraud data that the banks pass to watchdogs on the Financial Conduct Authority.
The Home Office said it was ‘committed to developing a scheme which will give consumers useful information on banking fraud performance but will also avoid tipping off criminals by publicising potential vulnerabilities’.
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