Anyone who loses their money to fraudsters through their own fault often cannot count on the goodwill of their bank. The most important precautionary measures are simple.
Marco Franchetti, the longstanding banking ombudsman, warns customers against attempted fraud.
“The fronts between banks and customers are hardening”: The balance sheet of the banking ombudsman Marco Franchetti, who will resign from office at the end of 2022 after almost ten years, is sobering. His job is to mediate in disputes and develop amicable solutions to avoid unnecessary lawsuits. In 2021 he and his team did this in almost 2000 cases. One in five of these was a case of fraud, and the trend is rising. But the banks are increasingly leaving their customers out in the cold when they have made the crucial mistake.
Digitization and fraud
According to Franchetti, there are reasons for this hardening. “The banks are under pressure to succeed,” he says. Since the introduction of negative interest in 2015, this has applied more than ever, especially in business with small customers. The customer sees and feels this with little things: the paper bill costs extra, you have to do an increasing part of the work yourself digitally. “The banks used to be more generous,” Franchetti sums up.
Technological advances also play a major role. Customers are now mostly in contact with their bank online, increasingly via mobile phone. This enables new scams: Recently, numerous bank customers received an SMS saying that they had to pay CHF 1.90 to receive a postal item. Only: The linked bill was for thousands of francs and a fake recipient. And yet some customers have not checked and paid the amount. Because the payment process is easier with the smartphone, it is all the more important to check the amount and recipient again.
Not everyone is equally affected, older people are more strongly represented in the cases of the Banking Ombudsman. The scammers often attack them in a targeted manner, and not only with the notorious grandchild trick. Younger people who have grown up with digital tools often have a better sense of the corresponding scams; where exceptions prove the rule.
In most cases, the banks cannot be held liable for self-inflicted damage, as in the SMS fraud case described. Anyone who sends money to a scammer is unlikely to get it back. Franchetti’s advice is simple and not new, but important: “Be vigilant.” In particular, one should heed the regular warnings from banks and authorities.
Dispute over fees and the Russia sanctions
Cases of fraud, however, only make up a small part of the work of the ombudsman. Payments that have not been made or excessive fees also regularly cause dissatisfaction between the bank and customers. The ombudsman’s office has developed into a seismograph that records the changes in Swiss banking: in 2013 it registered problems with kickbacks and retrocessions, followed in 2015 by negative interest. Since the start of the war in Ukraine at the end of February, the ombudsman has already processed a handful of cases relating to sanctions against Russia.
In one case, for example, a bank refused to transfer tens of thousands of francs to an organization in Germany that provides military aid to Ukraine. The ombudsman could not settle this case; the bank stuck to its categorical no. Franchetti says that when it comes to issues surrounding international sanctions, there is often very little room for maneuver. After all, some banks have been persuaded to state their reasons more clearly why a transaction was not carried out.
This comes as no surprise, since the risks for the banks themselves are very asymmetrically distributed, especially when US sanctions are involved. If you let a suspicious payment go through, you face high penalties. Therefore, in the case of Russia, they acted very cautiously, especially at the beginning when a lot was still unclear, and preferred to block one too many accounts rather than too few. The measures can still be relaxed.
Marco Franchetti will remain in office as ombudsman until the end of the year; he is succeeded by Andreas Barfuss, who is currently part of the extended management team at the Bankers Association and is responsible for legal and compliance issues. Even if the banks abolish their negative interest rates, he will hardly run out of work.