Credit: Fraud

Treasury written question – answered at on 7 September 2023.

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Photo of Hilary Benn Hilary Benn Shadow Secretary of State for Northern Ireland

To ask the Chancellor of the Exchequer, what security checks financial institutions are required to make for credit card applications in order to prevent identity fraud.

Photo of Andrew Griffith Andrew Griffith The Economic Secretary to the Treasury

The Financial Conduct Authority (FCA) is responsible for regulating the consumer credit market. FCA rules dictate that firms (including those offering credit cards) must have adequate policies and procedures in place to counter the risk that they might be used in financial crime, such as identity fraud. Furthermore, firms must ensure that the systems and controls monitoring these are subject to regular assessment.

Firms are also required by law to verify someone’s identity when they establish a business relationship with them. This includes when opening a credit account such as a credit card. Firms are required to take a proportionate approach commensurate with their assessment of the risk. Each firm will have their own policies on identification, customer due diligence and on the circumstances in which additional security checks should be undertaken. Firms are assisted in making such policies through industry produced guidance. The government has also published a Good Practice Guide for firms on how to prove and verify someone’s identity, which can be accessed here:

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