TACKLING INVESTMENT FRAUD TOGETHER
The Investment Association, in partnership with UK Finance, encourages all members to take part in this pioneering cross-industry initiative which shares details of genuine bank accounts used by members, to offer a new fraud prevention control for investors.
Already in practice and highly effective, participation would offer an added layer of protection for investors who are targeted by Authorised Push Payment and Brand Cloning frauds (amongst other types). Please view the video below to hear from Paul Davis, Fraud Director at TSB, to hear about this project's impact and potential.
HOW TO PARTICIPATE
Member firms simply need to provide their firm's bank account details in an encrypted email to Adrian Hood, Financial Crime and Regulatory Expert at The Investment Association.
The details needed include:
- Firm Name and FCA Reference Number
- Bank Account Details
- Sort Code, Account Number & Account Name
- Merchant ID, Current Name & any previous names (for card payments)
Your firm's bank account details will be uploaded to a secure portal operated by UK Finance and also utilised by the National Crime Agency (NCA). If you would like to hear more about the initiative or ask any questions, please don't hesitate to get in touch.
Access to the database is restricted to authorised personnel only and uses the same platform utilised by the NCA to share confidential information (including information pertaining to JMLIT), securely with UK banks. The information on the database is highly secure, and protected with controlled access rights. For more information or if you belong to a firm whom this may not directly apply to, please see our FAQs below.
Which banks does this initiative apply to? All UK high street banks are included and any other banks who, as members of UK Finance, have signed up to participate.
Does this cost us extra to participate? This initiative comes at no extra cost to members of The IA.
Who will be able to view our firm’s bank account details? Your firm's bank account details will only be visible to employees of UK Finance (restricted to those with controlled access rights) and any UK Finance member banks which have agreed to participate. A data sharing agreement has been signed with UK Finance, to set out the process, duties and liabilities of this initiative. The account information will be provided to UK Finance using the same portal that law enforcement (including the NCA) use to share confidential information with banks.
How does this help to reduce fraud? Through years of data gathering, The IA is well aware that many of its members are having their brands cloned by organised criminals who cause serious reputational damage to the firm and trick retail investors into handing over their life savings or pensions pots, by convincing them that the money is going to genuine accounts belonging to investment firms. The legitimate bank account details that we are sharing with banks will allow them as they process the payments, to ensure that any payments to accounts not on the list are either delayed or blocked, while also warning the investor. Alternatively, payments made to those accounts which are on the list can be processed much quicker, saving time and avoiding unnecessary delays.
What if our firm’s bank account details change? Members are encouraged to inform The IA whenever their firm’s bank account details change and The IA will also remind firms, on an annual basis, to check that their details are valid.
What are the main benefits? Participating would (and already does) prevent fraudulent scams targeted at investors while simultaneously enhancing the efficiency of the payment process for investments made to legitimate accounts. There are potentially huge, life-changing, benefits for retail investors who are at risk of losing very large sums of money which are of extreme importance to them. It would reduce the incidence of investors who are deterred from making investments, after having been defrauded. The investment management industry would therefore benefit from an improved reputation and a higher level of trust that comes with a safer investment ecosystem. For firms there are significant benefits that come with having their reputation protected, as a result of not having their brands cloned by fraudsters. Lastly, payments being made to legitimate accounts would be less likely to be blocked (although banks would still undertake their checks to ensure that payments are correctly authenticated).
How should we respond if the money paid for investments is handled by Third Party Administrators? If this is the category that applies to your firm then we'd still be very keen to hear back from you as your TPA's bank account details could be added to the database, in that case. If so, please send us the company name of your TPA and an email address/contact details of someone whom we can communicate with.
We do not have any retail clients, does this still apply to us? There would definitely be benefits from your participation despite being in this position - it would allow banks to identify suspicious payments being directed towards fraudsters who purport to represent your firm, thus protecting investors and preventing fraud.
We operate in the UK however our accounts and/or customers are only in other jurisdictions, does this still apply to us? There would definitely be benefits from your participation despite being in this position - it would allow banks to identify suspicious payments being directed towards fraudsters who purport to represent your firm, thus protecting investors and preventing fraud.
Is this a pilot or a test scheme? On the contrary this is an initiative, which has approval and support from The IA’s Board of Directors and is already fully operational. The NCA has also included this scheme in a list of significant industry actions that can act to prevent investment fraud – they believe that it is so effective that they (and UK Finance) are looking to extend this to other sectors.