Question for Home Office - banks up to their old tricks again?

[Ross Anderson]

I'm somewhat concerned at a piece on the front page of today's
Guardian, to the effect that Barclays are being allowed to have one of
their staff tried in camera for blackmailing them about how lousy
their encryption systems are:

	http://www.guardian.co.uk/uk_news/story/0,3604,576922,00.html

Many list members will recall the row over `phantom withdrawals' from
cash machines in the early 1990s, when the banks basically decided to
lie about their system security and blame customers for fraud. (See
http://www.cl.cam.ac.uk/users/rja14/#Reliability for more). This
pretence was exploded when a number of bad guys were convicted of ATM
fraud and sent to jail. For a while the banks behaved themselves, but
they have recently gone back to blaming customers for fraud. ATM fraud
is, my sources tell me, rising again. Economists continue to discuss
which of these is cause and which is effect (see 
http://www.nytimes.com/library/financial/columns/060100econ-scene.html
for more).

It's appalling that the banking industry can tell customers who
complain of fraud that they must be mistaken or lying, and then have
criminal trials held in private if they might expose this. On its
face, the court's decision appears to be oppressive and an abuse of
the process of law. Perhaps some organisation like Liberty, or the
Consumers' Association, might care to challenge it?

I also have the following questions for Simon and friends at the Home
Office. Does it not occur to you that there might, just conceivably,
be some link between authority's haste to help banks out of minor
embarrassments, and the fact that some large high street banks never
report any of their private banking transactions as suspicious under
the money laundering regulations? And does it not occur to you that
Britain's solemn undertaking to take money laundering seriously in the
future will require some fairly fundamental cultural changes in the
regulatory and law enforcement environment?

In the USA, some three thousand bankers are prosecuted for fraud and
other financial offences every year, including over a thousand at the
rank of vice president or above. Over half of them do jail time. But
no-one can remember the last time a senior manager of a bank in
Britain went to jail for anything job-related. Go figure.

Ross