Do more for victims of £1bn bank scams, says watchdog
MORE than £1billion is estimated to have been lost to bank transfer scams in just three years, according to the consumer group Which?
The watchdog is calling for vital protection for people who have been tricked into transferring money to a fraudster to be made mandatory.
Which? analysed bank-transfer fraud statistics since the start of 2017. The research shows that the projected total lost since then, based on current trends, stands at about £1.1billion.
A voluntary code to refund victims of authorised push payment (APP) scams was introduced in May 2019, but not all banks have signed up to it.
The code makes it easier for people who have been tricked into authorising a bank transfer to an unsuspecting criminal’s account to get a refund, in situations where neither they nor their bank is to blame.
TSB has its own fraud refund guarantee, which means that if a customer is clearly the innocent victim of fraud on their TSB account, it will refund the money lost.
The bank released new figures, showing that, since it launched its guarantee, TSB has reimbursed more than 99 per cent of its APP cases where a customer claimed they had been duped into sending a payment to a fraudulent account.
Furthermore, TSB said it had weeded out bogus claims, where claimants had been found to be complicit, while genuine fraud losses had been returned to victims.Which? said the industry’s voluntary code should be made mandatory, alongside the introduction of “confirmation of payee” services that would enable people to check the name of the person they are paying.
The measure will ensure that a check is made on whether or not the name a customer enters when making a payment matches the account details to which it is being transferred.
In effect, this helps to stop fraudsters from posing as trusted organisations, such as a bank or solicitor, and tricking people into making payments to them.
However, some banks could not confirm to Which? when they would implement this layer of verification.
Currently, Which? estimates that about £320million of losses to customers could have been prevented if confirmation of payee had been introduced at the start of 2017.
Pressure
These findings are encouraging consumers to put pressure on their banks to sign up to both the code and confirmation of payee.
Gareth Shaw, head of money content at Which?, said: “It is vital for all banks to commit to basic namecheck security, and the whole industry should sign up and follow through on the protections offered by the scams code.
“If the banks fall short of making these commitments themselves, these initiatives must be made mandatory by the Government.”