What do banks do to fight fraud?

The financial institutions have an important signal function in the fight against suspicious transactions, tax evasion and money-laundering practices. The institutions in bordering countries do not fulfil this function. It also wishes to emphasise the difference between financial fraud, which by definition is illegal, and tax optimisation, a service to its customers that remains within the limits of the law.
In the fight against internet fraud, the financial sector tries to encourage public opinion to be on its guard when spreading personal and financial data.

Reporting suspicious transactions

The financial institutions have an important signal function in the fight against fraud and money-laundering practices. They are obliged to report suspicious transactions and persons to the Cell for Financial Information Processing (CFI), an independent administrative authority with legal and financial experts and a high officer of the federal police who must prevent and fight money-laundering.

In 2011, the financial institutions sent 3,831 reports, representing 19.2% of the total number of received reports. The exchange bureaus reported the largest number of suspicious transactions: 12,364 or 61.8%.

It is also mandatory for the financial institutions to keep banking data and to set up internal proedures to facilitate the detection of suspicious transactions.

In the coming years, the Belgian money-laundering legislation will be examined by various international institutions. In the next two years, the Financial Action Group (FAG) will evaluate how Belgium has implemented its recommendations to counter money-laundering. Next the European Union will come with a new anti-money laundering Directive (the fourth already) to stop the phenomenon. The new Directive will mainly focus on the vigilance of financial institutions towards their customers, the investigation into the real beneficiaries and the mutual business relationships.

Tax evasion

In Belgium, the financial sector acts as a mediator between the financial and economic actors, the citizens and the governmental bodies. It deals with most financial flows, which means it is in a position to facilitate the collection of a number of taxes such as the deduction of the withholding tax on securities or the withholding tax on professional income.

In neighbouring countries, the financial sectors do not have this role and therefore they need not act in the event of tax evasion. The financial sector wishes to develop into a system in which tax collection is done via alternative channels (for example via the tax return). That way, it will have to make additional efforts in the field of information exchange, but it will be able to release operational funds that can be used for financial services.

Tax optimisation

The financial institutions help their customers to optimise their financial flows in such a manner that the latter can enjoy the best possible conditions in respect of taxes. It is important, however, to point out that a clear difference is made between this tax optimisation and tax fraud. 

Secure internet banking

The financial sector does not only endeavour to prevent and fight money-laundering practices, it also undertakes to attack fraud via internet banking.

For years the financial institutions have cooperated intensively with the National Bank of Belgium (NBB) and the Federal Computer Crime Unit (FCCU within the Federal

Police) in all aspects of secure internet banking. Within Febelfin specific working groups were set up that meet regularly to discuss internet banking and card payments.

In the tracing and prosecuting of money mules (persons who act as intermediaries for criminal organisations by transferring fraudulently obtained money for criminal organisations) the financial agencies work closely together with the competent authorities. They always take action against these money mules so that they can be prosecuted in criminal courts. This means that the mule will be less able to get a loan or other service from their own bank.

www.safeinternetbanking.be aims to make the consumer aware of the dangers that careless surfing behaviour may cause when the consumer is internet banking. The site informs about the most frequent fraud techniques and the protection mechanisms of the banks, it shows the latest figures and also gives many safety tips.

Dave campaign

To encourage people to be on their guard and take care when transferring personal information via the internet, Safeinternetbanking.be set up a fun campaign. In the campaign, Dave has a central place, a medium with “paranormal” gifts. Accidental passers-by could go to him for free and personal advice. A service that was sure to be received well. However, behind Dave some hackers were hiding who whispered all kind of information in the medium’s ear that the customer had left on public websites. What are the names of his children? How much was his house? How much does he have in his bank account? How much did he spend last month on clothes? And what is the number of his bank account? The video has turned into an international success.

It has been viewed more than 6 billion times on YouTube and has become one of the most popular viral campaigns ever.

View the video on YouTube