Should online fraud compensation be curtailed?

Last week the Metropolitan Police Commissioner, Sir Bernard Hogan-Howe, stirred up a hornet's nest by suggesting compensation for online fraud victims should be curtailed if people are lax with their internet security.

"If you are continually rewarded for bad behaviour you will probably continue to do it but if the obverse is true you might consider changing behaviour," Sir Bernard told The Times. "The system is not incentivising you to protect yourself. If someone said to you, 'if you’ve not updated your software I will give you half back', you would do it."

At present online fraud racks up enormous losses and it is spiralling out of control. Losses hit £133.5m in 2015, a rise of 64 per cent in just 12 months. A large reason for these losses is that most of us really don't protect ourselves very well online. The two most commonly used passwords are "123456" and "password", despite repeated warnings that we have to use stronger passwords.

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Banks and building societies build strong security software to protect our accounts, but few of us bother to keep the security software on our computers up-to-date.

Sir Bernard has been accused of 'victim blaming' and compared to police officers 30 years ago who would blame rape victims for wearing short skirts. But, it isn’t same at all.

Suggesting that victims be held partially responsible if they don’t secure their accounts properly isn't the same as blaming rape victims for dressing provocatively. It is the same as insurance firms not paying out for burglaries if you left your front door wide open.

"I think there will be cyber-insurance in the future, in the same way that home insurers will not pay out if you do not lock your front door," Commander Chris Greany, a senior fraud office, told The Times. "There needs to be a conversation in society If people choose not to take sensible precautions with their property, will they in the future be refunded?"

It seems only reasonable to me that people should be expected to take steps to protect their assets online, in much the same way as we’re expected to keep our bank cards and pin numbers safe.

But, that doesn’t mean banks and building societies should be able to wash their hands of responsibility when hackers manage to access bank accounts.

"When we investigated last year, we found too often that banks were dragging their feet when dealing with fraud," says Which? Executive director Richard Lloyd. "The priority should be for banks to better protect their customers."

This is already happening. Earlier this year a new fraud taskforce was announced that would unite Financial Fraud Action UK, the City of London Police, the National Crime Agency, the Bank of England, fraud prevention agency Cifas and the CEOs of major banks. All with the aim of tackling banking fraud.

But while they try to find new systems and weapons to fight cybercrime, is it really too much to ask for the rest of us to use strong passwords and keep our security software up-to-date? You lock your front door, start locking your cyber door.