Many victims of bank transfer scams are being “abandoned” by banks when trying to get their money back, a study by Which? has found.
Measures including a voluntary reimbursement code have repeatedly failed to adequately protect consumers and provide reimbursement for victims, the consumer group said.
Scammers pocketed £479 million in 2020 from authorised pushed payment (APP) fraud alone, whereby victims are tricked into transferring money.
Which?, however, said reimbursement rates remain extremely 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.
The reimbursement code states 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.
Despite this, figures from the Financial Ombudsman Service indicate that banks are getting many decisions wrong, with 73% of complaints about APP fraud upheld in favour of consumers in 2020-21.
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 particular whereby a First Direct customer in his 70s was denied full reimbursement for £180,000 losses to an investment scam.
The bank responded saying 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.
Another case outlined by Which? showed that 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 had 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.
Lloyds classed this as a case of APP as although the customer didn’t move the money herself, she was still aware that payments were being made.
Discussing the incident, 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.”
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.
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