Insider fraud is rising problem for British banks

Bank staff pressured by criminal gangs to commit large-scale fraud against customers pose a rising problem for British banks and building societies, the industry said recently.
Two and a half years ago, British comedian Harry Hill had 279,000 pounds ($488,600) stolen from his Halifax bank account by a bank employee who said she and her family had been threatened if she did not cooperate with the criminal who approached her.
Now a number of Britain's leading banks and building societies say this type of crime is on the increase.
"We are aware of increased instances of staff being approached and intimidated," British Bankers' Association spokesman Brian Capon told Reuters.
The Financial Services Authority (FSA), Britain's financial industry regulator, published a survey this week saying insider fraud was one of the most serious threats faced by large financial groups in Britain.
"The most common example offered by firms was incidents of staff being approached outside work and offered money to sell confidential information," the report said.
Britannia building society spokeswoman Emma Taynton-Young said not only were gangs trying to target bank staff in this way, but they were also trying to place gang members as bank workers in order to commit fraud.
"This is increasingly a major concern for banks and building societies," she said. "We've always had really tight vetting procedures but we do have to be extra vigilant."
YORKSHIRE HOTSPOT
Taynton-Young said the northern English county of Yorkshire - home to a large and expanding network of call centres for banks and loan companies - had become a regional hotspot for this type of crime.
Abbey, Alliance & Leicester, First Direct, GE Consumer Finance and Halifax are some of the area's biggest financial and call centre employers.
West Yorkshire police told Reuters they were aware of instances where bank staff had been coerced by gangs to commit fraud, and of criminal gang members getting jobs within banks in order to defraud.
Both West and South Yorkshire police have dedicated economic crime units to combat fraud, but they do not collate data on this type of crime and could not say whether it was on the rise.
The FSA report, published on Monday, said many firms had tightened their employee vetting procedures but not all staff were vetted.
Barclays, Yorkshire Building Society and Nation-wide all said this was a growing industry problem and they had put procedures in place to raise staff awareness. "Fraud is a big issue, full stop," said Barclays spokesman Andrew McDougal.
"This type of fraud does happen from time to time, we are aware that it is happening and we have a zero tolerance policy."