CASH & CREDIT 1

In Finsbury Square, London, stands the impressive modern building whose marble and glass hallways house APACS, founded by a consortium of banks and financial institutions to oversee their joint interests including automated systems, security, and fraud, especially in relation to plastic cards and ATM transactions.

On this evening, the lights were burning late in these offices of the great and the good. In the main boardroom, a cloud of cigar smoke hovered above the long and elegant table where sat these modern knights of financial Camelot, the chairmen and major players who represented the banks and other financial institutions.

The meeting was chaired by the Director-General, Farquhar-Brown, a man who was sophisticated and clever, and not complacent. Yet time in this structure had taught him that his decisions must always be tempered by compromise, by the very nature of the institutions the consortium consisted of. They were competitors first and foremost, after all. He had position, but in reality he had little power, he was a virtual first secretary of a financial United Nations.

In this room with him, sitting at the long table among the most important financial people in the Country was a Junior Minister from the Treasury, something of a token gesture from the government at this stage.

“Gentlemen, this meeting is called to order,” said the Director- General, and a gradual hush descended

over the room, leaving his voice slightly echoing among the crystal chandeliers of the high ceiling. “We have noted an unusually high level of fraudulent activity among our loans and credit card transactions. The volume of such transactions and of general defaults has risen by some 20% in the past year alone. At this rate of growth, we could be discussing a level of 50% by next year, and that is obviously unacceptable. I have asked you here tonight so that we may discuss what steps can be taken to neutralise this threat to our business. Are there any comments at this stage?”

The chairman of a major high street bank, who had only recently been knighted, was first to speak. Sweeping his hand and the cigar it held in an arc of acknowledgement towards his peers, he said unemotionally, almost like a Mafia Don.

“All of us have become used to levels of fraud ever-increasing, and after all, our business is also increasing at such levels, year in year out. So what is new?”

A murmur of agreement rumbled round the table, and the Director-General replied, trying to disguise the impatience in his voice.

“Fraud is indeed always with us, but I don’t think you’ve grasped the figures we are talking about here. This is a 20% growth on what we may call ‘normal’ fraud. If this is allowed to go on and grow at its present rate, it will threaten our business to a very significant degree”.

Lord Sefton, the chairman of a major building society signalled to the Director-General that he wished to make a contribution, and once again the room stilled, as the portly red-faced northerner spoke, his accent unchanged by his years of success and high society.

“So let’s get down to brass tacks. Three questions for you - One - why is this happening? Two, what’s brought the change? Three, what can we do about it?”

“I can answer questions one and two by saying that we believe - my investigating officers and I - that such activity is being led by an organisation rather than consisting of a random series of unconnected events” said Farquhar-Brown in a matter-of-fact businesslike voice. “This organisation must be very large, covering the whole country in fact, and it is growing week by week. In our opinion, this is fraud on a highly organised basis. The answer to the third question is more difficult. We could eradicate this problem at a moment’s notice by closing down our loan and credit business......” A hubbub of protest drowned out the Director-General as he struggled to continue through the ensuing noise.

“Gentlemen, Gentlemen!” He was shouting now, the echoes of his voice carried by the cavernous room, the chandeliers ringing gently, like barely audible crystal bells.

“Gentlemen! If I could continue!” he said, calming himself down as the muttering voices reluctantly receded.

“Gentlemen, the fact is, that is the only certain way of eradicating this problem completely, but I accept it would be an operation which would nevertheless kill the patient”.

A nervous ripple of laughter crossed the room as he continued.

“What could also be done is to ensure a much more rigorous examination of each application, so that only the genuine applicant would be successful”.

“Hold on a minute!” said Lord Sefton, “What we’re talking about here is a complete revamp of our existing systems. Everyone in this room knows that’s impossible. The cost and time factors are just not on!”

A rumble and grumbling of assent punctuated his words. Farquhar-Brown had anticipated all of this, but had laid out the situation as he saw it mainly for the benefit of his own position at a later date. As a master of compromise - the very nature of his appointment - he had laid out the stall. No one could later accuse him of complacency, he had placed the onus squarely on his associates, who were virtually his employers. Now he was able to put forward the compromise solution he had in mind all along.

“Gentlemen, I propose that we set up a special body to deal directly with this problem. This virtual task force will comprise police officers of the highest calibre, as well as the best from our teams of investigators and specialised accountants etc.”

Slouching languidly in his seat, his narrowed eyes fastening on the Director-General like a weasel, another captain of financial industry raised his voice.

“If this so-called task force is to have any real bite to it, it must be led by someone with teeth”. “Do we have such a man?” asked the recently knighted banker, looking doubtful.

“Oh yes” said the Director-General, “I believe

we have”.