Sam Gyimah MP has demanded the banking industry do more to protect customers from new types of financial scam such as ‘vishing’, after a couple from Godstone were defrauded of their life-savings worth £42,300.

Vishing (Voice phishing) is a type of telephone scam in which victims are deceived into transferring funds to fraudsters posing as representatives of their bank. It exploits a loophole in the telephone system that allows the line to be kept open up to two minutes after the victim believes the call has ended.

Alongside courier scams, vishing is a type of ‘mandate fraud’ for which the banks refuse to accept liability as the transaction was authorised by the legitimate account holder. After vigorous lobbying by Mr Gyimah, his constituents were eventually reimbursed by their bank, which insisted the move was purely a gesture of goodwill.

The problem is growing, with Financial Fraud Action UK identifying vishing as a key driver for the 14% rise in card ID theft last year, the cost of which increased from £32.2m to £36.7m.

Following the case, Mr Gyimah has written to the Chief Executive of the British Bankers Association to demand banks take action to protect their customers. He has also raised the matter with Andrew Tyrie, Chairman of the House of Commons Treasury Select Committee, and the Committee is considering ways to take this forward. Specifically Mr Gyimah has called for the banks to:

Support a new, industry-wide public information campaign, to improve awareness of the latest scams and what customers can do to avoid them.

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Make verification of their identity standard practice when communicating with customers. At present only the customer has to provide identification to their bank, and not the other way around. If the bank were required to confirm its identity to the account holder on every occasion none of these scams would be possible.

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Review the balance of information given to customers, ensuring that details of scams are placed sufficiently prominently on banks’ website homepage and other communications.

Mr Gyimah said: “The experience of my constituents and others targeted by this scam is truly horrifying. It could happen to anyone. That is why we need co-ordinated action from the industry to raise awareness of the latest scams and ensure customers are well-informed of the dangers posed by fraudsters.

“It is not acceptable for banks to shrug their shoulders when they could be doing much more to protect their customers from being hit by scams in the first place. The onus is always on the customer to protect themselves, surely the banks must have some responsibility to do the same. Customers are required to prove their identity when calling their bank, and if banks had to do so there would be far fewer of these types of fraud. Nor is it excusable for banks to have information on the latest scams buried deep within their websites. They offer great advice which is only sought out and seen after customers have become a victim. With an average age of 70, it is clear that the victims of these scams are often the elderly and vulnerable, and that a well-funded public information campaign is needed to make sure that people are wise to the latest tricks.

“Fraud prevention is not only about protecting the banks. More needs to be done to protect their customers, before thousands more are robbed of their life-savings.”