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This Transcript Is Issued on the Understanding That It Is Taken from a Live Programme As It Was Broadcast. the Nature of Live Br THIS TRANSCRIPT IS ISSUED ON THE UNDERSTANDING THAT IT IS TAKEN FROM A LIVE PROGRAMME AS IT WAS BROADCAST. THE NATURE OF LIVE BROADCASTING MEANS THAT NEITHER THE BBC NOR THE PARTICIPANTS IN THE PROGRAMME CAN GUARANTEE THE ACCURACY OF THE INFORMATION HERE. MONEY BOX Presenter: PAUL LEWIS TRANSMISSION: 6th OCTOBER 2012 12.00-12.30 RADIO 4 EXTRACT: FIRST MONEY BOX PROGRAMME, OCT 2nd 1977 (Music) Good morning, I’m Peter Hobday. And I’m Louise Botting. And this is Money Box. LEWIS: Well that wasn’t me. That was the Money Box time machine taking us back to our very first programme - October 2nd 1977 - because this week is our 35th anniversary. More of that later. But today, how secure is the new service from NatWest that lets you take cash from a machine with no more than a six-digit code? Changes to council tax benefit could mean that 2 million working age families have to pay more towards their local taxes. And if you have savings, how much can you earn on them? Savings rates have started falling, but where are the best deals? But first, you may have heard or seen this advert recently. NATWEST ADVERTISEMENT: (Music) There are times when we all need help - help like the NatWest emergency cash service. So if your debit card is lost or stolen, you could still get your cash from our ATMs any time of the day. NatWest: helpful banking. 1 LEWIS: That’s NatWest and Shirley Bassey advertising its new service which allows customers to withdraw emergency cash by tapping in a six-digit code instead of using their bank card. There’s a similar system using a Smartphone to get the code for times when … well you just can’t be bothered to carry round a debit card. But how easy is it for fraudsters to access your account from their phone? Bob Howard’s been finding out. HOWARD: If you’re a NatWest customer and you lose or mislay your card, its emergency cash system allows you to phone up and get a security code which you can take to an ATM to withdraw cash. And if you’re registered for mobile banking, you can also download a mobile app and get a security code through something NatWest calls Get Cash. But in August, Tim from London had £950 fraudulently taken from his account after somebody applied for withdrawal security codes. The money disappeared in eleven ATM withdrawals in just three days with the fraudsters making sure they never exceeded NatWest’s limit for each withdrawal of £100. Tim didn’t know it was possible to withdraw cash from NatWest without using a card and banks rarely discuss with customers how a fraud has been carried out. So when Tim first phoned to report the fraud, NatWest refused to tell him what had happened. But his bank statement had emergency cash next to each transaction, and in another call to the bank Tim got some clarity. TIM: She began to read my file aloud, which enabled me to know a little bit more about the system, and she said, “You’ve been defrauded by an iPhone application on the emergency cash system. I said, “Emergency cash? How do they do that without the PIN?” “Oh they don’t need a PIN,” she said. HOWARD: NatWest confirmed to Money Box that the money had been withdrawn via security codes issued using its new mobile app. Tim was registered for online banking but not mobile banking, so he could not have used the app to take the money; and making eleven cash machine withdrawals in three days, six of which were in just one day, was not Tim’s normal spending pattern. NatWest quickly accepted he hadn’t made the withdrawals and Tim thought a refund would be straightforward. But 2 NatWest then accused him in a letter of giving his personal details to a fraudster via a phishing email. NATWEST LETTER: Under the provisions of your terms and conditions of the card, customers are required to keep their card details and personal identification number secure at all times. After taking the circumstances of the fraud into account, I’m not in a position to refund the disputed transactions. HOWARD: But although Tim had received such emails, he had never sent his banking details to anybody. After Money Box contacted NatWest, it said it would refund Tim the £950 as a gesture of goodwill. But Tim says he still wants to know how a fraudster managed to sign up for mobile banking on his account, download the app and carry out eleven emergency cash machine withdrawals. TIM: It’s a huge liability that you don’t actually know about. I had to find out what emergency cash was, and I’ve contacted the bank straightway to say under no account, whoever it is on the phone, whoever details they’re giving out, ever hand out emergency cash. I’ve never wanted emergency cash, I’ve never asked for it, and I don’t want it as a facility. HOWARD: Nobody was available from NatWest to give an interview about cardless cash withdrawals. The bank admitted it had suffered other fraud losses via these systems, but insisted it had stringent security measures in place. For example, it said to download the app customers had to first apply for mobile banking, which required a combination of card and personal details and their online banking number, and a letter would be generated to the customer’s home address, alerting them to the fact that mobile banking had been activated. Tim didn’t receive this letter and he still doesn’t know how fraudsters were able to obtain these details and NatWest hasn’t told him. Dr Stephen Murdoch from Cambridge University’s Computer Lab believes any criminal who finds a way round the security, like the man who defrauded Tim, would be amply rewarded. 3 MURDOCH: I’m sure a lot of fraudsters are thinking about using this application because it’s now relatively easy for banks to identify fraudulent transactions and reverse them even several days after they’ve happened. And so when the fraudsters can get access to this mobile app, what this app makes really tempting for fraudsters is that they can use it to get cash. I think that’s what is going to make it a priority for them. LEWIS: Stephen Murdoch ending that story by Bob Howard. And if you’ve had similar problems, let us know via our website: bbc.co.uk/moneybox. Click on ‘contact us’ at the top of the page. Several of you have already. Tim’s not alone, it seems: Dawn from Devon says she lost £1,000 in nine emergency cash transactions two weeks ago; Jackie from Wiltshire says she lost £900 earlier this week; and Paul tells us he lost more than £2,000. Do let us know your experiences. Nearly 5 million people who get their council tax reduced on grounds of low income, sometimes to nothing, will see big changes from April. The Government’s handing over the whole system to local councils - that’s more than 300 of them in England alone - and at the same time it’s cutting the funding by 10% while insisting that pensioners are paid the same as now. So working age people will bear the brunt of the cuts. They could see their benefit reduced by 20% or more. Most working age people will have to pay extra. Some will have to pay for the very first time. Dr Peter Kenway is with me. He’s Director of the New Policy Institute, a think tank which has been looking into this. Peter, for those who don’t know, just explain what council tax benefit is now and who gets it. KENWAY: Yes, council tax benefit is a social security benefit that is available to low income households to reduce the amount of, if you like, ordinary council tax that they have to pay. As you’ve already said, it’s a system that’s been in place for 20 years. The rules are set nationally and the Treasury picks up the bill. As from April, that’s no longer going to be the case. Each local authority - that’s as you say more than 300 … I think about 325 local authorities in England - will all have their own schemes. Pensioners are to be protected and so the brunt of the adjustment (and there 4 is a cut in the money from Treasury) will fall on low income working age households. LEWIS: So that whole 10% cut - which I think is nearly half a billion pounds altogether, isn’t it - will fall on the families who are not protected, which is working age families? KENWAY: That’s right. I mean local authorities have been given other powers - to look, for example, at how much they charge or don’t charge to empty properties. So it’s not completely the case that it’s all going to fall on working age; but the only people who are going to be impacted are working age families - that’s correct. LEWIS: And why are they making these changes? Is it just to save the 10%? KENWAY: I mean I think that’s a very good question. The argument is that it will give local authorities an interest in seeing people in their area enter work. Whether local authorities can do that is a good question. LEWIS: And I suppose if they have a take-up campaign, as many councils do because lots of people who could get this benefit don’t, then the burden will fall on them rather than the Treasury? KENWAY: No that’s completely correct.
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