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Banks are Holding Consumers Responsible for Online Fraud

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I ran across an interesting article titled "Keeping your home computer protected from hackers is up to you, not the bank" on the Toronto Star that is pushing for consumer accountability on certain types of fraudulent activities.

"It is evident that transactions were performed using your identification and password," Levesque concluded. "The compromise was outside the bank's system and the person entered our system legitimately."

Therefore, she said, the bank wasn't liable for acting on instructions it honestly believed came from the customer.

From both a consumer and technologist perspective I think this is generally a good idea. Is it the banks responsibility to baby sit consumers computers? I hope not! Consumers have grown too dependant on protection from "someone else" ie the bank. There needs to be a level of accountability for not properly securing your computers. A lot of this is common sense and not rocket science. Both Microsoft and other companies have pushed consumer security articles and newsletters. There should be little excuse.

A great example of this, do you leave your car unlocked with the alarm not set with a brand new stereo inside? Of course not. We learn that there are things like car alarms out there we can get installed. We learn to use these car alarms to prevent these activities.

However, I do not think that the bank has no responsibility in this either. The bank should provide:

  • Consumer awareness - Probably the biggest issue is educating a new online consumer on safe online computing. Outlining what the bank is accountable vs. the customer.
  • Secure entry entry points - Providing secure mechanisms to log on to online banking, two factor authentication, etc.
  • Anti-Fraudulent Monitors - Alerts to customers of suspicious activities
  • Identification and Prosecution of fraudulent banking sites - Banks should really be doing more of this. These sites are a direct attack at consumers but have a very long term affect on the banking business. For example, the OLB channel saves banks significant amounts of money by automating existing processes, reducing headcount, customer service, etc. If customers lose confidence in the online channel there are measurable impacts to the bottomline.

To summarize, I think there is responsibility on both sides here. Consumers should be increase aware that the burden of security does not rest solely on the bank in which they do business with. The bank can provide the safeguards but consumers need to employ safe computing practices in their daily online life.

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