Thread: Credit card fraud - time to end the 'free money' attitude towards offenders?

I work in the financial sector and every time we have afraud committed against a card holder we simply refund them. We do not report any fraud under £5000 to the police as they have told us they do not investigate minor fraud. This includes 3 x £4,999 (even though the total fraudis more than £5,000)

This makes card small scale cloning and theft an investigation-free crime. If someone steals your purse it's a crime but if they mis-use your card they are not even chased by the police. No wonder card-fraudis now a bigger criminal industry than the drugs trade.

Is the reason that there is no investigation because the banking class and their political friends want financial fraud to be punishment free so they can continue to engage in the activity that caused the financial crisis?

Does anyone know why the banks are just being asked to write off low-scale card fraud (thinking of Target here and how there will beno prosecutions) Is it time to increase the penalties for financial crime so that they match drug trafficking?

Originally Posted by Citadel

(thinking of Target here and how there will beno prosecutions)

I had not heard that there would be no prosecutions.
Could you provide a link to this?
Thanks.

Originally Posted by Citadel

Is the reason that there is no investigation because the banking class and their political friends want financial fraud to be punishment free so they can continue to engage in the activity that caused the financial crisis? Does anyone know why the banks are just being asked to write off low-scale card fraud (thinking of Target here and how there will beno prosecutions) Is it time to increase the penalties for financial crime so that they match drug trafficking?

Here in Australia we have a dedicated body, AUSTRAC, which was principally established in response to anti-money laundering efforts and to establish constraints to prevent the financing of terrorism. For the financial services industry, this has proved to be a pain in the proverbial as the responsibility for detection of financial fraud now becomes an obligation on the industry and not a responsibility of the regulators. AUSTRAC regulation now means an added level of red-tape for the industry in addition to the swathe of additional regulatory burdens imposed by agencies such as APRA (the prudential regulator) and ASIC (the corporate regulator).

In Australia, consumer protection from 'shonky' financial practices is taken very seriously with bodies such as ASIC and APRA. The regulation of the industry and it's products/services is significant which makes it fairly difficult for a shonky operator to slip through the regulatory cracks. There are a few examples that slip through the cracks but the ability for a cataclismic event to be caused such as that created in the sub-prime mortgage market in the US is significantly stifled. Australia was fortunate to ride the GFC fairly well predominantly attributed to the regulatory environment which slapped severe restraints on capital adequacy requirements of the financial institutions and lending practices.

Unfortunately however what this means for a business operating in financial services in Australia is the need to establish a compliance framework that bears a significant cost for industry. The extremely competetive marketplace combined with the 'extremely' uneven playing field (relating to direct and indirect subsidies directed to the too big to fail institutions (eg. the four pillars in Australia)) means that these costs are rarely able to be transferred to the consumer for the small player.

While the industry in Australia is fairly robust, the intense compliance burden faced by the sector creates an extreme barrier to entry for new competition. The big fish in the pond benefit from this fact. It is actually in the interests of the big banks to play the compliance game as this actually leads to reduced competetition and increasing market share. In relation to your query whether a blind eye is directed towards low scale financial fraud in the sector, in Australia this does not appear to be the case. In fact the reverse is true as it gives the big fish more room in the pool to swim in. During the GFC, the big four banks thrived at the expense of the smaller fish attributed to the Government Guarantee that was applied to depositors of the larger banking institutions. The big fish actually increased market share during the GFC and have continued to become ever bigger 'too big to fail institutions'.

What however needs to be said is that a level of responsibility needs to be directed towards he consumer. The blame game should not be directed entirely to the advisors and dealers in financial services and products. What appears to have been forgotten is the principle of 'buyer beware', the need for a consumer to take responsiblity for risk decisions and also the need for a consumer to take direct measures to safeguard and protect their identity. Some countries, such as Australia seem to have moved to a more extreme part of the spectrum and have developed a 'Nanny State' mentality which has created a significant burden on business, over-bureacratise financial systems and have left them unwieldy, sluggish and costly. I assume there is a balance somewhere. I am not sure however where that lies.

Unfortunately the regulatory constraints on Australia's financial services industry may actually act as a two edged sword in the long term. If a significant 'crack' forms in the system over here through a regulatory oversight, then the domino effect in Australia and our dependence on the big 4 banks will completely stall the economy and we wll quickly become a total basket-case for years to come:-))

Originally Posted by RedPanda

Originally Posted by Citadel

(thinking of Target here and how there will beno prosecutions)

I had not heard that there would be no prosecutions.
Could you provide a link to this?
Thanks.

I know it as I used to liase with our fraud team but it's not stated policy (for obvious reasons). It's not written down but if anyone has tried to report a cloned card to UK police they will have been told it's a bank issue.

The police are not going to spend thousands on hunting for a cloner who's taken hundreds.

Originally Posted by Citadel

Originally Posted by RedPanda

Originally Posted by Citadel

(thinking of Target here and how there will beno prosecutions)

I had not heard that there would be no prosecutions.
Could you provide a link to this?
Thanks.

I know it as I used to liase with our fraud team but it's not stated policy (for obvious reasons). It's not written down but if anyone has tried to report a cloned card to UK police they will have been told it's a bank issue.
The police are not going to spend thousands on hunting for a cloner who's taken hundreds.

Originally Posted by Citadel

Is the reason that there is no investigation because the banking class and their political friends want financial fraud to be punishment free so they can continue to engage in the activity that caused the financial crisis?

From your own evidence, the answer is clearly "No".
The reason that there is no investigation is because "The police are not going to spend thousands on hunting for a cloner who's taken hundreds."

Originally Posted by Citadel

I work in the financial sector and every time we have afraud committed against a card holder we simply refund them. We do not report any fraud under £5000 to the police as they have told us they do not investigate minor fraud. This includes 3 x £4,999 (even though the total fraudis more than £5,000)

This makes card small scale cloning and theft an investigation-free crime. If someone steals your purse it's a crime but if they mis-use your card they are not even chased by the police. No wonder card-fraudis now a bigger criminal industry than the drugs trade.

Is the reason that there is no investigation because the banking class and their political friends want financial fraud to be punishment free so they can continue to engage in the activity that caused the financial crisis?

Does anyone know why the banks are just being asked to write off low-scale card fraud (thinking of Target here and how there will beno prosecutions) Is it time to increase the penalties for financial crime so that they match drug trafficking?

In the US if credit card fraud is committed against you, the banks won't refund any money until you have made a police report. How many people do you know that wouldn't make a police report so they could get reimbursed for their losses? They might not put a lot of effort into catching the thief, but sooner or later the thief will be caught for something. If your fraud case can be added to the list of crimes committed by the thief then so much the better.