Banks failing to protect victims of transfer cons, says Which?


Consumer group Which? said urgent action is needed to ensure banks do more to protect their customers and treat them fairly and consistently.

Measures, including a voluntary reimbursement code, have repeatedly failed to adequately protect consumers and provide reimbursement for victims,Which? said.

Losses to scams where someone is tricked into transferring money to a fraudster – known as authorised push payment (APP) fraud – soared to £479million in 2020.

But Which? said reimbursement rates remain shockingly low.

Banks are finding victims at least partly responsible for their losses in 77 percent of cases assessed in the first 14 months of the code.

Financial Ombudsman Service figures also indicate that banks are getting many decisions wrong, with 73 percent of complaints about APP fraud being upheld in favour of consumers in 2020-21, Which? added.

This is despite the reimbursement code stating victims should get money back unless the firm can establish the customer did not have a reasonable basis for believing the person organisation they were sending money to was genuine.

Which? money editor Jenny Ross said: “Fraud can have a devastating impact on the victims, and it is unacceptable for so many to be abandoned when they turn to their bank to try and get their money back.”

Which? highlighted a case in which a First Direct customer in his 70s was denied full reimbursement of £180,000 lost in an investment scam.

First Direct claimed that it had “every sympathy” with the customer but it would not credit him with all the funds as he authorised the payments.

Which? said mandatory consumer protections should be introduced for all payment providers, including a reimbursement obligation, to “help tackle the reimbursement lottery”.

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WHAT YOU CAN DO

1. Call your bank directly, checking its website for the correct number.

2. If the fraud involved stolen personal information, get a protective registration with Cifas, at £25, to avoid repeats.

3. Change passwords for any accounts that have been compromised and any that use the same password. Set up two-factor authentication wherever possible.

4. Being scammed can take a huge toll on mental health. Mind and Victim Support have confidential helplines.

5. Sign up to the free Which?



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