UK bank’s pioneering efforts may open floodgates to FX con men

If the affiliate marketers get wind of TSB’s new all encompassing protection for customers, they may swoop onto UK clients. Caveat Emptor!

British customers of FX and CFD firms have never had it so good.

The influx of marketing-led non-entities that created a tremendous amount of discourse and attracted the attention of ill-prepared regulators on the islands did not approach Britain, the nation’s domestic market, long established electronic trading firms having provided specialist retail CFD platforms to a loyal audience for many years.

Britain’s retail traders actually feel like genuinely valued customers of bona fide financial technology-led, evergreen giants with their own infrastructure an a deep understanding of the FX business stretching back from their highly advanced internal platforms of today to their origins in the late 1980s.

This week, a further milestone was reached, bolstering the confidence of British customers even further, that being TSB, one of the country’s largest retail banks, and its decision to provide full protection to any retail customer of the bank against any type of fraud.

Whilst fraud protection is not intrinsically new, the method by which TSB is about to offer it is.

This morning it was made clear by the bank that all customers of TSB who are victims of any type of fraud will be entitled to a full refund by the bank of any money lost to fraudsters, even if the customer authorized the payment and agreed to terms and conditions.

Ordinarily, under most consumer laws which are based on the British civil legal system, customers which are victims of fraudulent schemes would have to submit their case to the Financial Services Compensation Scheme (FSCS) or equivalent in other regions, which is a government fund supported by subscriptions from banks that covers consumers to the value of £85,000 in the UK.

That particular scheme is an independent body and will make its decision on whether a consumer has genuinely been a victim, however its main purpose is to provide some kind of recourse to consumers who have invested in a firm which then goes bankrupt, rather than has intentionally run away with money.

Defrauded customers would have to provide proof that they were actually diddled out of money, and in many cases, if they have signed and agreed to terms and conditions, and the firm was not regulated by the FCA when the FCA makes plenty of warnings to British customers never to operate with unregulated entities, the chances are it may be a case of no cover being offered because the customer agreed to terms and authorized the payment.

TSB’s stance is somewhat different and gives customers absolute carte blanche to agree to pretty much anything at all and still get their money back when inevitably something goes wrong.

With this guarantee, TSB have become the first UK bank to comprehensively cover their customers against third-party fraud.

Banks are only obliged by law to refund customers when money was fraudulently obtained without their knowledge by, for instance, stealing their debit card or obtaining personal details and using them to access an account.

Under existing rules, APP fraud isn’t covered as the payment is technically authorised and banks can legally say that the transfer was permitted by the customer.

Now TSB will refund all money fraudulently obtained by criminals and gangs in both authorized and unauthorized transactions limited to £1 million per claim.

Whilst this is a truly laudable step by a bank that has to repair its reputation following its IT failures last year which left bank accounts open to all kinds of abuse, it opens the floodgates for con men from the Mediterranean and the islands to swoop on British customers of TSB knowing that they will perhaps have a blaze approach to saying yes to any scheme knowing that they take zero risk.

Binary options and cryptocurrency fraudsters in Israel and Cyprus are well versed in how to target specific lead bases, as most of them can trace their dubious origins back to back street affiliate marketing and lead sourcing entities which led them into the chop shops that proliferate the region today.

These entities will know exactly how to gain access to a lead list of TSB customers who are of an age and demographic profile which may not constantly monitor the method by which electronic trading works, and are not existing customers of good quality firms such as IG Group or CMC Markets.

They will then call the clients and use their aggressive tactics to browbeat the polite, passive British audience who are used to good service and honesty by contrast to the Israeli and Mediterranean forcefulness and deceit, and knowing that they are fully covered by their bank will just agree to any terms, pay the money and then tell their story to TSB.

In cases like this, it is imperative that the government protects its financial ecosystem – known to be the very best in the world – from low end outside influences.

It is therefore FinanceFeeds opinion that Australia’s draconian move this week to mailshot every broker and tell them not to onboard clients from other regions was misguided. Australian brokers and APAC based clients go hand in hand and is a great business structure.

This letter should have been issued to British customers by the FCA, advising them to stick with British firms.


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