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Banks urged to delay large withdrawals to protect vulnerable customers

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Written by: Paloma Kubiak
21/06/2016
Financial institutions and charities should do more to protect vulnerable customers from scams, a new report has said. 

The Chartered Trading Standards Institute (CTSI) and Bournemouth University’s National Centre for Post-Qualifying Social Work are calling on banks and charities to:

  • Recognise their duty of care to dementia sufferers who could make an ‘unwise decision’ as a result of their cognitive state. The term is often cited in financial scamming cases.
  • Allow vulnerable people to put a 24-hour delay on new or large transactions from leaving their bank accounts and send an email or text alert to a carer or loved one at the start of that period.
  • Adopt a default that personal data is not shared without a clear opt in and that it is not held for longer than 12 months before permission is sought again, in order to prevent ‘suckers’ lists.

Financial scamming covers anything from false lottery wins, grooming on chat rooms, fake charity donations and pension scams. It is under-reported by victims due to embarrassment, but it is estimated that prize draw scams cost the UK public £60m per year while telephone scams are estimated to cost nearly £24m a year.

An ageing population means the proportion of older people with dementia and living alone is set to increase.

Leon Livermore, CTSI chief executive, said: “Vulnerability is not a term that is defined in law which means it is difficult for professionals to introduce measures to protect vulnerable people.

“We believe that banks and charitable organisations can do more without the need for legislation and that these relatively straightforward asks would lead to a dramatic reduction in detriment.”

Livermore added that adult social care faces a “massive funding shortfall” and people who are scammed are much more likely to need support.

“These measures will protect our ageing population and reduce the burden on the state,” he said.

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