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Should banks pay back all victims of online fraud?

Or are we responsible for our own mistakes?

Some people think we are responsible for our own mistakes. Others say banks benefit from our money so should cover the cost of fraud.

What it means: If you know more than four people then you probably know a victim of bank fraud: a quarter of Brits have been conned out of their money. The British government says banks have to reimburse you for so-called ‘unauthorised transactions’, such as if someone clones your credit card or steals your details to buy stuff without your knowledge.

But there’s no such protection for ‘authorised push payment’ (APP) scams, where crooks trick you into buying a product that doesn’t exist, or telling them your card details by pretending to be your bank or the police. APP scams can ruin lives, especially vulnerable people like the elderly are more likely to be targeted.

Some people, including the charity Which?, think banks should be the ones to lose out from APP fraud. Unlike many individuals, banks could swallow the cost - HSBC, the UK’s most popular retail bank, made £12.3 billion in profits in 2017. The obvious rebuttal is that businesses shouldn’t lose money for other people’s mistakes.

But banks benefit a lot from other people’s money - they use our savings to make loans, and keep the interest on the loans as profit. (They do pay us some interest on our savings, but nothing like as much as they make off loans.) The implicit agreement is that in exchange for us lending them our money they’ll keep it safe for us - so it’s not super unreasonable to expect them to cough up if it’s stolen.  

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?