Only 46% of wire transfer scam victims get money back, says Which?
Less than half of the losses of victims of fraud who transfer money to fraudsters’ bank accounts have been reimbursed under a voluntary code that banks inconsistently enforce, according to a consumer group.
Which? called for strengthening the code, introduced in 2019 to ensure money lost in wire transfer scams, and for mandatory standards to make the process “fairer and more consistent.”
£ 707,000 lost every day under the voluntary code
The group cited figures from UK Finance which show £ 412.9million was lost in 189,000 bank wire fraud cases between the code’s introduction in May 2019 and the end of 2020 – or £ 707,000 per day .
But which one? said only 46% of the money lost during that time had been returned, meaning the victims suffered a blow of £ 225million.
Wire transfer fraud, also known as authorized push payment (APP) scams, involves a scammer posing as a real beneficiary.
The code was introduced in 2019 and the banks involved are intended to offer more protection to customers against scams.
Banks that are part of the program include Barclays; HSBC, including First Direct and M&S Bank; Lloyds Banking Group, including Halifax, Bank of Scotland and Intelligent Finance; Metro Bank; NatWest, including RBS and Ulster Bank; In all the countries; Santander; Starling and the cooperative bank.
The code states that if a customer is not at fault, they should be reimbursed but Which ?, The Financial Ombudsman Service (FOS) and other consumer advocates have found that banks erroneously choose not to reimburse clients. losses.
This includes cases where victims are subjected to advanced tactics used by fraudsters, or when banks have failed to warn customers of the threat of a scam.
Gareth Shaw, Money Manager at Which ?, said: “Two years after the code was introduced, it is clear that the payment systems regulator must now take decisive action to prevent the continued devastation caused by this guy. of fraud.
“It must introduce mandatory consumer protection standards for all banks and payment service providers, and demand greater transparency from businesses on how they deal with this crime.”
“The regulator is currently consulting on the future of fraud protections – and we support the guaranteed reimbursement proposals. We also called for full transparency on industry refund rates so customers know how their bank is performing on the vital issue of fraud refunds. “
Banks have signed up to code to blame up to 77% of the time
Data from the Lending Standards Board showed that banks subscribed to the code partially or fully blame victims for being scammed up to 77% of the time.
The FOS also said banks are setting unrealistic expectations on customers to detect and prevent fraud.
An HSBC customer has not received a full refund after being scammed for £ 548 while booking flights for his family through a fraudulent travel website.
The bank acknowledged its role in failing to notify the client of this particular scam, but blamed the client for failing to examine the legitimacy of the business, for example, through Companies House.
A Bank of Scotland customer lost £ 27,000 after being the victim of an investment scam.
They made payments to a cloned company over the phone. The bank refused the refund, according to the mediator.
The payment systems regulator (PSR) argued that reimbursement rates are low and which ones? supports the PSR proposals to change the rules of the faster payment system.
The program aims to reduce payment delays between accounts receivable from different banks and has a transaction limit of £ 250,000.
They also ask the Treasury to give more power to the regulator in this area.
Ashley Hart, TSB Fraud Officer, said: “TSB strongly believes that innocent victims of bank fraud deserve to be protected from what might otherwise be life-changing losses.
“We have reimbursed 99% of all fraud cases since our fraud money back guarantee was introduced two years ago.”
Last week, which one? contacted all major banks and building societies to ask them to publish their reimbursement rates for wire transfer scams.
The deadline has been set for Friday, and responses are expected to be revealed shortly