Many victims of bank transfer scams are being “abandoned” by banks when trying to get their money back, according to Which?
The consumer group said strong and urgent action is needed to ensure banks do more to protect consumers and treat customers 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 £479 million in 2020.
But Which? said reimbursement rates remain shockingly low, with banks finding victims at least partly responsible for their losses in 77% of cases assessed in the first 14 months of the code.
Financial Ombudsman Service (FOS) figures also indicate that banks are getting many decisions wrong, with 73% of complaints about APP fraud upheld in favour of consumers in 2020-21, Which? added.
This is despite the reimbursement code stating that victims should be reimbursed unless the firm can establish the customer did not have a reasonable basis for believing the person or organisation they were sending money to was genuine.
Jenny Ross, Which? Money editor, said: “Fraud can have a devastating impact on 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 one case in which a First Direct customer in his 70s was denied full reimbursement for £180,000 losses to an investment scam.
First Direct said it had “every sympathy” with the customer’s situation, but it was unable to credit him with all the funds as he authorised the payments to debit his account.
In another case, Which? said a 60-year-old Lloyds customer was initially denied reimbursement for £64,000 after receiving a text from a fraudster claiming to be from her bank asking to verify a transaction.
The fraudster persuaded her to download a remote access app to “secure her account”. The fraudster made 14 payments and only £4,057 was reclaimed from the receiving banks.
Even though she did not move the money herself, Which? said Lloyds classed it as APP fraud because she was aware payments were being made.
It initially said it would not refund any money, but after Which? got involved it refunded the seventh payment onwards, acknowledging later payments should have triggered more security checks.
Lloyds said: “Unfortunately (the customer) did not take sufficient steps to verify the identity of the caller who claimed to be from the bank.
“She also downloaded software which granted the fraudster access to her device and her online banking account.”
Which? said mandatory consumer protections should be introduced across all payment providers, including a reimbursement obligation, to “help tackle the current reimbursement lottery”.
Here are some tips for scam victims from Which?:
1. Call your bank directly, checking its website for the correct number.
2. If the fraud involved any of your personal information, consider signing up for a protective registration with Cifas, which costs £25 for two years.
3. Change your passwords for any accounts that have been compromised due to fraud and any that use the same password. Set up two-factor authentication wherever possible to provide another layer of protection.
4. Being scammed can take a huge toll on mental health. Mind and Victim Support have confidential helplines.
5. Make sure you are aware of new or emerging threats by signing up to the free Which? scam alerts service.