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House of Lords ups the stakes in online fraud debate

Laws to make banks responsible for cybercrime by making them pay for losses incurred by electronic fraud will be introduced, if the House of Lords Science and Technology Committee has its way.

It its latest report, the committee has called upon the government to introduce the legislation in a bid to boost efforts in tackling internet crime, reports the ITWire.

"If banks were forced to accept liability for online fraud this would provide an incentive for them to improve the security of their online banking operations," said the report.

"The Committee received evidence that where a pin or password is used in an online fraud banks often refuse to refund customers claiming they must have been negligent or complicit in the fraud."

The committee has also recommended a review of the methods of compensation because it believes the Financial Services Ombudsman and the courts do not adequately refund customers whose banks refuse to cover their losses.

The Science and Technology Committee has been in existence since 1979 and is one of the main investigative committees in the House of Lords.

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