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PSR - Payment Systems Regulator - and Push Payment Scams

Thursday, 1st March, 2018

We were asked by the Payment Systems Regulator (PSR) whether they could release our firm's response to the PSR's consultation on 'Mitigating the Impact of Authorised Push Payment Scams' along with the other responses to the consultation.

Our response to them was 'Happy for you to make the response public, if you can guarantee that banks and trade organisations will not act to punish or treat our firm less favourably for expressing those views.'

Since the PSR actually has those powers, we understood that we were giving the PSR full permission to reveal our response publicly.
We were somewhat taken aback when the PSR chose not to do so.

So to be transparent, we show our response in full below:

We are responding below to the PSR’s Report & Consultation - Authorised push payment scams.

Question 1:
In your view, will the best practice standards developed by UK Finance be effective in improving the way PSPs respond to reported APP scams? Please provide reasons.

No.

a)      One of the PSR’s core principles is to ensure competition and competitiveness amongst PSPs in the payment sector.
It must be recognised that UK Finance represents only a small number of PSPs – albeit by far the largest (and handling the majority of payments).
In recent times, as Fintech growth continues rapidly, UK Finance’s members have been under competitive attack by the growth of non-‘UK Finance’ fintech firms, and whilst UK Finance is still the largest part of the payment sector, their dominance is being eroded.

Setting standards in the payments industry is a key factor in which some firms benefit from the new standards and some are harmed.
Exactly how the i's are dotted and the t’s crossed in the standards can have enormous repercussions in reality to payment firms involved. Regulation and standards are recognised in the payment sector as the biggest drivers and hindrances to competition.

So handing over responsibility for standard setting to UK Finance (which the Competitions and Markets Authority keeps revisiting due to the danger of it being perceived as an pseudo-monopoly in the sector) is not only a regressive step – for the PSR as a competition commissioner it is the equivalent of giving the prisoners the running and keys of the jail.

I note that according to the PSR’s report, UK Finance’s best practice standards have not been made publically available – only a summary.
This seems somewhat Kafkaesque ! What are the detailed best practice standards ?
As a fully FCA authorised and practicing PSP, I find this collusion between the PSR and UK Finance (whilst excluding other PSPs) rather scary, and certain to have adverse economic effects to the UK.

b)      For example, the standards produced may demand PSPs perform some steps which the members of UK Finance (as large banks and credit card companies) already routinely pay for and perform, but which are not suitable for other PSPs.
By UK Finance mandating these steps as part of their best practice standards, UK Finance can effectively shut out the payment market for many non UK-Finance PSPs.
This is likely to kill innovation, and eliminate competition.

c)       Please note that despite our firm being a fully authorised and practicing PSP, we have had no contact nor consultation whatsoever from UK Finance in their work in relation to the report so far.
And this despite our firm being a specialist concentrating on eliminating APP fraud.
This is just one indication that UK Finance and the payment industry represent two very different sets of members, which only overlap in part.

d)      We have extreme reservations about the low number of APP fraud cases quoted in the report, as declared by UK Finance.
It seems from the quarterly ONS (Office of National Statistics) figures reported that the actual number of APP fraud cases is magnitudes higher than the roughly 80,000 p.a. reported by UK Finance.
We believe the UK Finance figures are not accurate, and the ONS figures (pointing to the hundreds of thousands each year) are more representative.
Some of this may be due to UK Finance methodology, and some may be due to overly-restrictive reporting terminology adopted by UK Finance.

e)      There are failings in the best practice standards even despite the above.
At the beginning of the process, the consumer will have suffered a real loss, and a possible (but not definite) claim for reimbursement from the Payer’s PSP and/or the Payee’s PSP.
The best practice standards rely entirely on the Payee’s PSP making a full, honest and complete disclosure of facts to the Payer’s PSP. In reality, and with the threat of imposition of a heavy reimbursement liability, very few if any Payee’s PSPs will provide clear evidence to the Payer’s PSP which will incriminate themselves. This will just not happen.
Neither the Payer’s PSP nor the consumer will have any investigative rights, and will be forced entirely to rely on the Payee’s PSP’s statement. So the basic process will not work effectively, as in most cases it will prove impossible to prove that the Payee’s PSP has to reimburse the consumer, as the Payee’s PSP simply will not release incriminating information which would put itself in that position.
Likewise in respect of the Payer’s PSP to the consumer.
The whole scheme therefore has no teeth, and is effectively a waste of time.
Unsurprisingly, since if the scheme would be run effectively, it would likely incur significant liability to UK Finance members, so it is not surprising that this state of affairs has ensued.

f)       The best practice standards should ensure that banks and PSPs who open accounts with them using false IDs, and thus allow fraudsters to enter the payment chain via those accounts, face effective sanction of such weight that it is economically less viable for the bank to open the false account and risk sanction rather than conduct effective measures to ensure false IDs cannot be used.
A good indicator of when this is working is when the large UK banks demand a simple and easy-to-set up secure-API from the UK Passport Office and the DVLA where the bank can enter the details of a UK passport/driving licence presented to it, and get back a yes/no indicator as to whether the licence/passport is currently valid, and not stolen or forged. This is such a simple, quick, almost zero-cost and obvious service to set up, but until the banks demand it from Government, it will not happen. And the banks are not interested in demanding it until they are forced to effect proper anti-false ID measures.
Unfortunately, the best practice standards are very unlikely to be effective. and so will not act as an incentive to UK banks to prevent accounts being opened with false ID (the vast majority of which are currently UK ID’s – foreign IDs are a much, much smaller problem in number, requiring special attention).
With bank accounts continuing to be opened as today with false IDs, APP fraud will continue unabated, and will continue to grow.

g)      The best practice standards should ensure that banks and PSPs, who fail to prevent their account holders using those account as mule accounts to launder the proceeds of crime, face effective sanction of such weight that it is economically less viable for the bank to suffer sanction than to educate their consumers and business customers never to allow their bank accounts to act as mule accounts.
Only when banks actively take steps to clearly educate their customers that allowing accounts to be muled is illegal will this money laundering vector stop.

At present, banks do not effectively educate their customers.
As a result, if and when a mule (typically, say, but not always a student) comes to Court accused of using their bank account to mule the proceeds of crime, the accused states they were not aware this was illegal, and the Court will not provide any real punishment due to the accused’s self-reporting ignorance.
As a result, the Police have stopped arresting bank account mules in most cases, as there is no point investing huge amounts of Police time and money in taking these mules through the lengthy criminal justice system if the Courts will end up providing no real punishment.
So in the UK today, account mules can continue without any real danger, even though bank account mules are easily identifiable and will always be caught.
The only way to stop the cycle is for UK banks to clearly educate their customers that account muling is illegal.
As soon as they do, Courts will immediately respond by jailing account mules, as the mule will now have no defence for their illegal actions (the mules are always easy to catch).
And then, unlike today, Police will always chase and catch the mules, as this is easy crime to prosecute.
And then account muling will of course stop.

But nothing will happen until the banks act to clearly educate their clients.

Unfortunately, the best practice standards are very unlikely to be effective. and so will not act as an incentive to UK banks to prevent accounts being used to mule the proceeds of crime.
With bank accounts continuing to be used unrestrained by account mules, APP fraud will continue unabated, and will continue to grow.

h)      I appreciate that the PSR has no sway over the FCA,  but the FCA is legally mandated to prevent UK high-street banks from laundering the proceeds of crime.
The statement by the PSR at 4.20 in the report: ‘Successful adoption of UK Finance’s best practice standards by the industry should prevent the need for the FCA to take a more interventionist approach to tackling APP scams.’ is incorrect. The FCA needs to lead in this role – in fact it is legally mandated to enforce this role.
As seen in f) and g) above, the FCA is failing badly in this legally mandated role.
The PSR needs to impress on the FCA that it is the FCA’s duty to take steps f) and g) forward and prevent UK high-street banks laundering the vast amount of money from APP fraud that is currently being laundered by FCA authorised banks in the UK.
It is the FCA, and not the best practice standards, which should be driving this required remedy forward.

i)        The best practice standards do nothing to implement the main preventer of APP fraud.

Confirmation of Payee (CoP) is already in use today for the millions of the UK’s PAYM payments that are made each and every year.
And CoP has virtually eliminated APP fraud via PAYM.

The most critical part of the report in respect of reducing APP fraud is the implementation of CoP.
And the report states that CoP will not be fully implemented by the last bank until 2021 or later (page 27 top box of report) !

This is a disaster, and the PSR must reconsider allowing this unacceptable state of affairs to occur.

I am reliably informed that CoP will be available to all UK mainstream banks, via a similar mechanism to that used by PAYM, within the next month.
The number of APP frauds being perpetuated in the UK is enormous, and growing.
Criminals will migrate to the last bank not using CoP.
If CoP is not mandatorily forced to be introduced by the UK high-street banks immediately (within the next six months), then millions more UK consumers and businesses will lose sometimes life-changing sums to APP fraud before 2021 or later.

With the immediate availability of CoP to UK banks from next month, it is critical that the PSR mandates its adoption with immediate effect.
If not, it is likely that one of your very own close relatives (your grandmother, your daughter, your cousin) will suffer a significant life-changing loss to APP fraud that would have been prevented if CoP was in operation.

Please pay particular attention to this crucial point.

j)        The infographic that the PSR produced alongside the report (can be found here: https://www.psr.org.uk/sites/default/files/media/PDF/App-Scam-Infographic.pdf) shows CoP introduced as a fuzzy matching yes/no response process, without showing the exact payee’s name to the payer.

CoP has worked without problem for many years for millions and millions of PAYM payments by showing the payee’s bank account name to the payer, prior to payment authorisation.
This is clearly proven to have no issues, and just works.

The type of fuzzy-matching CoP that the PSR is proposing just will not prevent APP fraud.
In an attempt to protect privacy, the account name of the payee will not be shown to the payer prior to authorisation in a fuzzy-matching scenario, only a yes/no/maybe response.
Such a response is not fit for purpose, and will lead to APP fraud continuing unabated. Criminals will name accounts in such a way that this method will just not work effectively to reduce crime.

Since millions of PAYM payments every year are already working with full CoP (by showing the full payee’s name to the payer), and since PAYM’s working-today CoP implementation has even stronger privacy issues than general CoP as the payee’s name is linked to a mobile phone number under PAYM (as opposed to a name only being linked to a less critical bank account number), there is absolutely no reason to introduce a fuzzy-matching version of CoP which will not prevent crime.
Full CoP, showing the name of the payee’s bank account to the payer, must be implemented if APP fraud is to be reduced dramatically.

Question 2:
Should a contingent reimbursement model be introduced? Please provide reasons.

On balance, no – although this is a finely balanced decision.

Push payments work because the payer has to actively make a decision to authorise a payment.
So there is always a point in time when the payer has the opportunity to assess whether there is sufficient proof that the payment is genuine to continue.

Of course, APP fraud operates because consumers are manipulated into wrongly authorising payments when they should decline.
But there always existed the opportunity for the payer to take extra due diligence steps, and make extra enquiries, which would have prevented the fraud.
It was the decision of the payer no to do so that led to the fraud, and the payer will always bear some, at least partial, responsibility.

Combine the above with the new FUD (Fear, Uncertainty and Doubt) that a receiving bank will have in accepting payments after contingent reimbursement starts. A receiving bank now will always have the possible liability of a contingent reimbursement hanging over it just from receiving a payment.
It is certain that receiving banks will change their Terms and Conditions to defend against such contingent liability.
Payment transaction times and receipts will lengthen, automatic processing will lessen as more automatic checks are introduced, and many more false positive alerts will be issued.
The UK payment system will start to grind to a halt.
And worse, receiving banks will change their Terms and Conditions to enable them to chargeback money from their clients. This is the greatest danger, and a real disaster waiting to happen.
UK business works well because it is still possible to make irrevocable payment from A to B, without possibility of chargeback by using a bank transfer (although not with direct debit, credit card, debit card or electronic money).
If A pays C (a stranger) by genuine mistake instead of B, there are already mechanisms in the UK today to undo this. So no change is required here.
But if the bank of B, due to the introduction of contingent reimbursement, now changes its Terms and Conditions so that it has the right under certain circumstances to reclaim a genuine payment back from B, then B will not have economic certainty of payment receipt when receiving a payment from A. B’s business behaviour will change due to this uncertainty, and the UK’s well-functioning economic process will start to fail.
It is critical that a consumer or business receiving a genuine payment by bank transfer knows with 100% certainty they are safe from chargeback – if this payment certainty is withdrawn, as it will be by receiving banks as the effects of contingent reimbursement start to bite, then the UK’s economic ability to transact through payment will be irreparably damaged.

Question 3:
Do you agree with our high-level principles for a contingent reimbursement model?

No

Please provide reasons.

Whilst the principles are broadly well framed, they include the following:

‘Consumers must have an incentive to take whatever steps they reasonably can to avoid becoming a victim of an APP scam. This can be achieved by defining the requisite level of care victims are expected to meet to be eligible for any reimbursement’

But it is impossible to define in practice the requisite level of care victims are expected to meet to be eligible for any reimbursement.
Since this level of care cannot be pinned down, the high-level principles are unworkable and non-functional.

in fact, paragraph 6.21 of the report correctly identifies that a significant segment of the consumer market (bad consumers) will claim for APP fraud to try and obtain reimbursement, even when no reimbursement is due.
This part of the report seems to have been forgotten when writing the above high-level principle.
Since bad-consumers will have a distinct incentive to claim for APP fraud when none occurred (they can regain hundreds or thousands of pounds not due to them), they will game the system and take steps to be able to demonstrate that they met the requisite level of care, when they actually set out to deceive the system.
In a realistic operating model, the high-level principle will just not work.

Question 5:
Do you agree that the measures being developed by industry (specifically UK Finance and the Forum) should be included as the required standards of the contingent reimbursement model that PSPs should meet? Please explain your reasons.

Please see Question 1) above, where it is explained why UK Finance is totally unsuitable for this role.
The Payment Strategy Forum (PSF) is ceasing to exist, so is not a candidate. In any case, the governance of the PSF was created in such a way that it was effectively a UK Finance controlled organisation, with outside payment sector views listened to but then discarded.

Question 6:
If a contingent reimbursement model is introduced, which organisation should design and implement it? Please provide reasons.

The heart of the contingent reimbursement model is the arbitration between the consumer, Payer’s PSP and Payee’s PSP as to whether a contingent reimbursement should be made, and by whom.
Once the arbitration process of these claims has been worked out, the rest of the building and administration should be designed around this central core.

As such, it is somewhat surprising that the obvious candidate for the role, the Financial Ombudsman Service (FOS), is not listed.
Obviously, there would need to be a change in legislation for the FOS to perform this role, but it is the natural party to do so.
If the FOS is not to do so, all the same costs and administrative burden will fall on another body – ignoring those costs and pretending that they do not exist is not fit for purpose.

So the FOS should be allowed by legislation to conduct the arbitration process for contingent reimbursement (if it is introduced).
And as it is doing so, it is natural that the FOS should also design and implement the process.
Since the process is very similar, indeed in many ways identical, to the FOS’s current workload, this is certainly not only the preferred solution, but the only realistic solution.

One further plus point from appointing the FOS is that the FOS would become involved anyway if a consumer did not get the redress they were seeking from the contingent reimbursement model, as they would any way then appeal to the FOS.
So since the FOS will be dealing with these cases eventually anyway, adding an unnecessary round of arbitration through another body is wasteful.

As already clearly explained above, under no circumstances is UK Finance fit to perform this role (see answers to previous questions to understand why).

Question 7:
In your view, are there any barriers to the adoption of a contingent reimbursement model which we have not considered? Please provide reasons.

See answer to Question 3.

Question 8:
Please explain, if relevant, how your organisation currently decides whether to reimburse a victim of an APP scam. Does this include an assessment of vulnerability?

Our PSP exists by its very nature to prevent APP scams from occurring.

Question 10:
Do you think it is necessary for a significant majority of, if not all, PSPs that provide push payment services to consumers to adopt the contingent reimbursement model for it to be effective? If yes, please explain if you think the model would need to be mandatory for PSPs.

Paragraph 6.40 which encourages the involvement of non-members of UK Finance within the scheme, provides no explanation of how UK Finance could prevent inbuilt bias for members and against non-members, if UK Finance operates the scheme.
For UK Finance to ameliorate this by setting a rule that there should be no bias will not in practice prevent widespread bias. A fox cannot run a hen-coop, and the PSR should not be considering such a possibility, even if it binds the fox to supposedly be fair to hens.


As a side point, in the answer to Question 1 it was explained why introducing Confirmation of Payee (CoP) is the most critical step to dramatically reduce and eliminate APP fraud.
The same reasoning used in Question 10 (that until the last bank changes to the new system, APP fraud will just continue by fraudsters migrating to PSPs have not adopted change) is equally true in relation to CoP. That is why CoP must be made mandatory for all PSPs and banks immediately (within six months).

Question 12:
In your view, how should the dispute resolution mechanism work and which organisation should oversee this? Please provide reasons.

Please see the answer to Question 6.
As explained in the answer to Question 6, it would be madness for any other body to perform this role except the Financial Ombudsman Service (FOS).

Please let me know if you would like any more information or clarification to the above.


Escrow companies authorised by the FCA must never be unclear or misleading

Thursday, 30th November, 2017

At Transpact.com, we welcome all competition in the escrow space.

Escrow is the only payment method where a payer and payee (such as a buyer and seller) can both be 100% simultaneously protected. Escrow really is the safest way for two parties to pay each other.
It is vitally important for both consumers and businesses that awareness of escrow's critical payment security is spread through vibrant competition in the escrow sector.

Escrow providers that are FCA regulated need to ensure that they play within the rules, and achieve total trustworthiness.
We at Transpact.com know, given our more than eight years of experience in creating the payment escrow sector in the UK and becoming Europe's leading escrow service.

Which is why an escrow service which is FCA authorised only removing content when approached by the Advertising Standards Authority (ASA) is undesirable.
That is exactly what occurred with www.ShieldPay.com, a new escrow service in the UK.
They put up a claim on their website homepage that was potentially misleading. When we pointed this out to them, ShieldPay.com refused to remove the claim.

Only when the ASA took up the case (on our instigation), ShieldPay.com were faced with either a full ASA investigation and ruling, or removing the potentially misleading claim.
At this point, ShieldPay.com chose to remove the claim.
You can see the ASA's involvement on the ASA's website here (if not shown, search for the date 29 November 2017 or ShieldPay).

It is disappointing that the ASA should need to get involved - escrow services which are authorised by the FCA need to be above reproach, and need to be clear and unambiguous. Of course, every firm can from time to time unintentionally make errors or omissions or suffer from ambiguity (we are not yet robots, and people occasionally make mistakes), but it should never take the intervention of the ASA to correct such matters.

Although ShieldPay.com agreed with the ASA around the 15th November 2017 to remove the claim, the potentially misleading claim was not removed from the ShieldPay.com website until sometime around the 29th November 2017, when the ASA's website revealed their involvement. ShieldPay.com seem to have believed that the ASA had provided them with permission to keep the potentially misleading claim up until this date, since they wrote to us and said "the ASA ... have agreed that we would amend or remove statements that could be misleading by the end of November as part of our update of content throughout the platform". Changing a piece of text (not graphics) on a website page is not a difficult task, and can be carried out in a matter of seconds or minutes. We believe that since ShieldPay.com agreed with the ASA to remove the claim as it might be potentially misleading, they should have amended their website homepage immediately - surely, that would have been in keeping with best customer practice ?

[As an aside, at this time ShieldPay.com's fees for a standard UK transaction at £60, at £600, and at £6,000 are £3.00, £15.00 and £90.00. Transpact.com charges for the same transactions are £2.66, £5.98 and £5.98. For a £9,000 transaction, ShieldPay.com's charges are more than 2,000% more than Transpact.com, and for an £11,000 transaction, ShieldPay.com's charges are more than 800% more than Transpact.com.
And Transpact.com's service is proven - only our service has been honed and perfected with more than eight years of real customer service and experience, and millions of pounds of customers' payments safeguarded.]

Transpact.com offers Best Payment API for
Online Marketplaces
Act now before PSD2 starts in Europe on 13th January 2018

Thursday, 28th June, 2017

On the 13th January 2018, online marketplaces across Europe that handle payment will have to register formally as Payment Service Providers and Money Service businesses, as part of the EU's Payment Services Directive 2.

The resulting burden on online marketplaces is almost unimaginable.
These online marketplaces will need to introduce costly and time-consuming new operational processes to actively verify the identity of their customers. They will have to engage and create anti-money laundering and counter terrorist-financing plans, and put these into operation under strict audit from dedicated HMRC or equivalent Government agency staff.
They will need to employ staff to monitor each transaction for money laundering and terrorist financing, and train all staff for signs of abuse. This is just a small part of the anti-money laundering burden - the requirements are hundreds of pages long.

And that is before the additional and separate Payment Services burden is considered, which comes into effect on that day.
Firms will have to protect client money, and ensure strict same day or next day payment deadlines are kept.
Each payment instruction from a client will have to be secured using two-factor secure authentication, introducing another radical change to each marketplace's business flow.
And any customer can now take an unsatisfied payment complaint to the Financial Ombudsman Service, which can cost the marketplace £600 even if the marketplace is found to be 100% correct.
Again, the above only touches on the mandatory Payment Services requirements.

The list of obligations, the change to business processes, and the additional legal burdens are only touched upon above, and there are many more obligations which will affect how marketplaces' operations are impacted and changed.

If you are an online marketplace that handles client payment, and you are situated or do business in the EU or EEA, seek assistance now (ask about PSD2 and its resulting obligations).

The good news is that using Transpact.com's ultra-low cost market-leading escrow API, designed specifically for online marketplaces, we can remove entirely the burden of PSD2 and AML, and actually put the marketplace in a better position than it is today.

Buyers will be guaranteed to receive the goods or services they were promised, or their money back - guaranteed.
Sellers will be guaranteed to be paid 100%.
The marketplace can continue to concentrate on doing what it does best - running and marketing the marketplace, without the management or staff expense of worrying about correct payment handling.

And most importantly, Transpact.com does not charge marketplaces any fee for the use of its payment engine, which automatically secures the marketplace's own fees and commissions as part of the process, so the marketplace's net revenue is actually increased.

So if you are a marketplace operating in the EU or EEA, do not delay - contact Transpact.com today - email Marketplaces@Transpact.com for full details (we conduct a brief vetting of marketplaces before giving them access to our API, as an initial check to their legitimacy).

Another Glowing Testimonial

Thursday, 18th May, 2017

We've been too busy conducting lots of escrow transactions, and providing top quality service to our customers, to update this blog much recently.
But the latest testimonial from a client is worth posting - as it sums up the experience we are fed back from our customers.

"We used Transpact.com recently to acquire valuable assets (£65,000 and £15,000).
Having tried a few of your competitors in the past, there is really no comparison - quite simply, Transpact.com offers a much better service at a far cheaper price.

I was particularly impressed to receive a phone call to double check on a potential issue - you went above and beyond.
We like to think we're pretty good at finding the best deals. These days I tell anyone who will listen to use Transpact.com - it's a no-brainer.
Thanks again."

Ben Tibbits, Deals.co.uk


Transpact.com is a not limited to transactions of this size, but also transacts many much smaller amounts, and also much larger amounts.

Welcome to TrustMark - Government Endorsed Standards Body

Wednesday, 28th October, 2015

Escrow protection in the construction sector is becoming almost mandatory.

Nowadays, in a construction transaction, it makes sense to use escrow as every buyer is guaranteed the work they were promised or their money back, and every builder is guaranteed 100% payment.

Builders in particular eliminate bad debt and never again suffer costly price reductions at the end of a job - just to get payment in. Builders who use escrow for every transaction often increase their take-home revenue by 10% or more by doing so .
And consumers are guaranteed satisfaction with the service.

With this background, we welcome our latest (but not only) escrow provider in the construction sector, TrustMark

TrustMark.

You can find details of their escrow product (partnered with Transpact.com) here.

We've added a fee calculator

Monday, 7th June, 2015

We've had quite a few requests to add a fee calculator, and we've now done just that.

Until now, we haven't seen the need as our charges are all clearly shown on our Prices and Additional Charges web-pages.

But to simplify matters even further for those who have asked, we have added a fee calculator. Transpact.com allows initial charges to be split between the payer and payee (buyer and seller), so for us a fee calculator is anything but simple.

The fee calculator we have added shows the total fee paid in total by the payer and payee (buyer and seller), and this can be misleading if compared to the fees of just one of the parties (at least one of whom, if not both, will be paying much less than the total fee shown).

Our fees also include the cost of the final payment to the client's bank account by bank transfer - something that other escrow services mostly do not include within their fee calculator.

Open Letter to BBC MoneyBox

Monday, 29th September, 2014

Below is an open letter sent today to the BBC MoneyBox radio programme team:

We are writing in response to Saturday’s MoneyBox programme (27/9/14) about fraud, ActionFraud and the National Fraud Intelligence Bureau (NFIB):

1) Transpact.com made many, many multiple reports to Police and other authorities from March 2014 onwards when our service started to be impersonated by a criminal. These reports included full details of bank accounts being used for fraud.
The Police and authorities did NOTHING, and did not contact us for details or to ask any questions about what was occurring.
This lack of any contact seems to be definitive proof that no action was taken by the Police or authorities to prevent the ongoing fraud.
Indeed, this was confirmed to us by Police personnel (see 3) below.

And the NFIB’s response on your programme, where they claimed that many cases have a lack of evidence to be able to be investigated, is bizarre – of course they have a lack of evidence if the NFIB do not contact the reporter of the fraud for details of the crime.

2) 'Sarah' stated on your programme on Saturday that ActionFraud/Police only took action when 300 people had been defrauded.
This is not true. It seems likely from events that six hundred or one thousand people or more could have been defrauded, and still no action would have been taken.
The Police took action only because on that day in July, the BBC ‘You & Yours’ radio show broadcast a programme detailing the litany of the defrauded to date in this fraud (you can listen to that programme here - it is the first item).
It is absolutely clear that no action would have been taken without ‘You & Yours’ being broadcast on that day, and the Police response was only in response to this Radio 4 programme.
We would not be surprised if no Police action had been taken even today, and the fraud was still ongoing, without the Radio 4 ‘You & Yours’ programme.
About a fortnight after the Police action started after the broadcast, the fraud stopped. We estimate that up to half a million pounds or more was lost to hundreds of innocent UK consumers to this one criminal for this one fraud (the Police confirmed that many people do not report being defrauded).

3) The Police are set up with an effective system to take down websites that infringe trademarks. The Police have expended a lot of expense, time and effort to operate an impressive unit (at the City of London Police) that protects companies’ trademarks and actively intervenes to take down and prevent trademark impersonation.
We were able to have fraudulent impersonation websites taken down from April onwards NOT because they were defrauding innocent UK consumers, but because they were breaching trademark.
The Police are not set up to protect innocent consumers (as your programme showed, tens of thousands are being defrauded without any response every month), but are set up, active and efficient to protect the trademarks of large business.

4) You finished off your programme by stating never deal with a website you do not fully trust.
Important and wise words.
But you failed to mention that the websites of FCA authorised firms are trustworthy. The FCA maintains an online register of authorised firms, and using a website on that list (exactly as on the FCA register, with no changes) is trustworthy and safe (not emails, not phone calls, not online chat).
The Press has an obligation to educate the public about simple steps they can take to verify what is a trustworthy website and what is not – you failed to do so – please remedy.

5) You stated on the programme ‘Pay by debit and credit card - then you can always get your money back’.
For payments of over £100 by credit card (as long as not via PayPal) for items for oneself (not others), you are correct – the payer is covered by Section 75 of the Consumer Credit Act.
But for payments by debit card and other credit card payments, this is not necessarily so, as you well know. Visa and MasterCard do have chargeback mechanisms, but these are not legally binding, are not formally published, and may or may not be excluded by small print or other factors – so there is no guarantee using these methods whatsoever.
Escrow payment through an FCA authorised service is fully secure and safe though (you failed to mention this).

6) Once again, we remind you many of the twenty thousand frauds per month mentioned on the programme rely on the high street banks laundering the proceeds of the fraud.
The high-street banks have an absolute obligation written into law to prevent this occurring, and the law allows very large fines and imprisonment of their executives if money laundering is not prevented.
And yet, the FCA, which regulates the banks, has seemingly done absolutely nothing to ensure that the banks prevent the funds from these frauds being laundered.
The FCA seems to accept the banks’ excuse that there is nothing they can do.
We believe this is nonsense, and that the FCA is fundamentally failing in its role to ensure the banks stop this money laundering.
The FCA has taken no visible public action, and has seemingly been convinced by the banks that there is nothing they can do, as if the banks act to stop this illegal activity (as is their duty) then the disruption to the UK banking system would be too great.
This is nonsense. If it was important enough to the banks, they would make it happen. But moving the proceeds of these crimes is completely unimportant to the banks, and will remain so until the FCA forces the banks to act, as indeed is the obligation of the FCA and the banks.
You - the Press - have not yet spoken out on this point.
And until you - the Press - bring to the public’s attention the FCA’s inexcusable lapse to allow the banks’ inexcusable lapses, the loss to thousands upon thousands of UK innocent consumers will continue every month.
Please act and report this lapse NOW.

Best Regards

Transpact.com on BBC Radio 4.

Thursday, 3rd July, 2014

Transpact.com today featured on BBC Radio 4, the first item on the You & Yours midday programme

You can listen to the broadcast here - BBC You and Yours programme link (www.bbc.co.uk/programmes/b0480343).

Transpact.com is quite rightly described by the BBC on the programme blurb as ‘a reputable payment site’, and ‘worth copying precisely because it's so reliable’.

It is a great tragedy that a criminal had to be involved in impersonating Transpact.com to finally get the BBC to give Transpact.com a mention.

We have nothing but admiration for Caroline, featured also in the broadcast, who forced the story onto the BBC's agenda. Once the BBC took up the story, all of a sudden the Police finally lifted a finger and are now for the first time investigating. Let's hope they quickly catch the criminal.

UPDATE 6 - Cyber Crime UK - It's so easy !

Sunday, 29th June, 2014


UPDATE 5 - Cyber Crime UK - It's so easy !

Tuesday, 24th June, 2014


UPDATE 4 - Cyber Crime UK - It's so easy !

Wednesday, 11th June, 2014



European Escrow Organisation letter to FINCEN (USA) -
A Money Launderers' and Terrorists' free-for-all if Escrow Unregulated

Tuesday, 10th June, 2014



UPDATE 3 - Cyber Crime UK - It's so easy !

Monday, 28th April, 2014



UPDATE 2 - Cyber Crime UK - It's so easy !

Friday, 25th April, 2014



UPDATE - Cyber Crime UK - It's so easy !

Sunday, 20th April, 2014



Cyber Crime UK - It's so easy !
Anatomy of a high-return cyber crime

Tuesday, 8th April, 2014



No Chargebacks !
Low Value Pricing (2.9%) Revolutionises Retailing

Thursday, 20th March, 2014



UKTI (UK Trade & Investment - a UK Government Agency) now endorses use of FCA authorised escrow services:
Article: How to clinch overseas sales (and also get paid)

Monday, 20th January, 2014



Mike Freer MP, our Local Member of Parliament, Assists

Thursday, 20th June, 2013



Transpact.com service model copied by Escrow.com.
Imitation is the sincerest form of flattery.

Friday, 5th April , 2013



Transpact.com, world's leading domain escrow service ?

Friday, 21st December, 2012



Another BBC Apology ?

Thursday, 15th November, 2012



The world leader in art markets partners with Transpact.com

Thursday, 9th February, 2012



Payment without delay across the EU

Monday, 9th January, 2012



Welcome AutoTrader - Transpact.com's latest website partner

Tuesday, 13th December, 2011



The Metropolitan Police recommend use of FSA Authorised escrow providers

Monday, 7th November, 2011



Why we raised our Prices for large payments

Tuesday, 4th October, 2011



MRI machines to Stethoscopes - MedWow.com

Friday, 9th September, 2011



FSA Registration offers little or no comfort

Monday, 8th August, 2011



More Websites use Transpact.com's API to integrate Escrow services into their websites

Monday, 11th July, 2011



Fraudster's access to Debit Card Details -
BBC gets it terribly wrong again !

Thursday, 16th June, 2011



HM Treasury replies Again

Monday, 6th June, 2011



HM Treasury replies

Wednesday, 4th May, 2011



Welcome BondPay.co.uk

Monday, 4th April, 2011



Government-linked Organisations getting it wrong ?
Bank / Credit Card Details Disclosure

Tuesday, 8th March, 2011



Response from HM Treasury ?

Friday, 4th February, 2011



An open letter to the Financial Secretary to the Treasury

Monday, 3rd January, 2011



Welcome MyArtBroker.com

Wednesday, 1st December, 2010



When should you use Transpact - Section 75 of the CCA

Friday, 22nd October, 2010



Partner Websites

Monday, 12th September, 2010



The Guardian

Friday, 23rd July, 2010



Exceptional Protection

Tuesday, 6th July, 2010



Tenancy Deposits - Is yours an Assured Shorthold Tenancy ?

Wednesday, 2nd June, 2010



Redsky Design - Web Designers Extraordinaire

Thursday, 22nd April, 2010



First Transpact blog

Monday, 19th April, 2010