BSI launches Code of Practice to protect vulnerable customers from fraud and financial abuse

Business standards company the British Standards Institution (BSI) has launched a new Code of Practice that gives recommendations to organisations for protecting vulnerable customers from financial harm that might occur as a result of fraud or financial abuse. Sponsored by NatWest, PAS 17271: Protecting Customers from Financial Harm as a Result of Fraud or Financial Abuse affords guidance on how to recognise customers who might be at particular risk from fraud and financial abuse and how to assess the potential risks posed to the individual. Those at risk can include individuals who find themselves in vulnerable circumstances, either temporarily or permanently, which can then affect their ability to communicate, understand, make decisions or take actions that are in their best interests.

The guidance in BSI’s Code of Practice distinguishes between fraud – a criminal act involving deception intended to result in financial gain, such as ID theft or online scams – and financial abuse. The latter is the criminal act of controlling a person’s property, money, pension book or other valuables intended to result in the financial or personal gain of the abuser. Financial abuse is typically carried out by people in a position of trust, such as partners, relatives or friends of carers.

How an organisation treats its customers can contribute to levels of financial harm. Inadequate systems and procedures that fail to identity, inform, protect and support customers can make it more likely that vulnerable customers are susceptible to fraud or financial harm. The Code of Practice provides detailed recommendations, guidance and a comprehensive checklist for organisations that want to implement change and achieve or maintain levels of good practice. Recommendations cover organisational principles, culture and strategy.

In cases where fraud or financial abuse has already occurred, PAS 17271 affords guidance on how to help and support customers and minimise future risks.

Fraud and financial abuse are widespread. Last year, there were over 1.85 million cases of financial fraud in the UK. During 2016, financial fraud losses across payment cards, remote banking and cheques totalled £768.8 million, representing an increase of 2% over the prior year. Experts believe this is only the tip of the iceberg given that, typically, only a fraction of all fraud cases are reported.

The Code of Practice is applicable to organisations of all types and sizes operating in the UK – in particular banks, building societies, credit card providers, credit unions and pension providers – that manage the money or other financial assets of UK consumers.

Responsibility to help the vulnerable

Anne Hayes, head of governance and resilience at the BSI, commented: “Financial institutions have a responsibility to assist the vulnerable. Anyone can be a victim of fraud or financial abuse, but we know from experience that some people are uniquely at risk. Individuals with a history of financial problems or learning difficulties, those recovering from addictions and the young are just some of the diverse types of people most susceptible. PAS 17271 was created to help organisations protect customers from financial harm. The bottom line is that Best Practice in systems and procedures can help prevent and detect fraud and financial abuse.”

David Lowe, head of fraud prevention at NatWest, asserted: “Being the victim of fraud can be devastating and, sadly, we’re seeing the complexity and sophistication of such criminality increase. We know that it’s our collective responsibility to support consumers and help prevent them from falling victim to fraud which is why we took the initiative to sponsor a BSI PAS in 2016. The BSI PAS provides the best platform for joining forces with the Government, other banks and industry partners and working towards a common goal.’’

Ben Wallace, security minister at the Home Office, explained: “Protecting vulnerable people from becoming victims of fraud or financial harm is a key priority for this Government. I really welcome the new guidance which will drive Best Practice in this area. It’s an excellent example of the collaborative nature of the Joint Fraud Task Force which sees Government, law enforcement and industry working together to tackle some of the toughest fraud issues in order to protect the public, and particularly so those at a higher risk of becoming victims. The national ‘Take Five to Stop Fraud’ campaign raises further awareness of how the public can take simple steps to protect themselves against the most common types of fraud.”

The development of PAS 17271 was sponsored by NatWest, with a Steering Group comprising financial institutions and consumer bodies. The broad consensus and buy-in from industry includes involvement in the development of the PAS by Barclays, the Building Societies Association, the Consumer & Public Interest Network, Financial Fraud Action UK, the Home Office Joint Task Force, KMB Telemarketing Ltd, the Metropolitan Police Service, National Trading Standards, the Office of the Public Guardian, Santander UK plc, the Scottish Business Resilience Centre and The Co-Operative Bank plc.

About the Author

Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications)

Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting.

In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector.

In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute’s George van Schalkwyk Award.

An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award.

Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site.

Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media.

Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014.

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