Good news – but we can’t afford any more delays
FOR years blameless fraud victims were routinely denied refunds.
Then in 2019, after a campaign by this newspaper, they were thrown a lifeline.
Major banks agreed to sign up to a voluntary code of conduct that requires firms to repay customers who have been preyed on by sophisticated scammers.
But this was only ever supposed to be a temporary solution while plans for proper regulation were thrashed out.
Yet three years later we are still waiting. Just half of victims tricked into transferring money to scammers were refunded by banks last year.
Meanwhile, the Financial Ombudsman, which deals with disputes between financial firms and customers, has seen complaints about fraud soar.
Tellingly, last year it ruled in favour of the consumer in around three-quarters of these cases. All too often banks are still trying to wriggle out of doing the right thing.
At Money Mail, we hear from scores of readers who have been caught out by the exact same scam but treated completely differently by their banks. One may receive a refund, another a partial repayment, while others are refused altogether.
The problem is that there is major loophole whereby banks can refuse refunds if victims have not taken reasonable steps to protect themselves.
And without clear guidance, firms can interpret this clause however they please.
Many, for example, try to pin the blame on victims by claiming they have ignored a warning posted on their website.
This is despite experts warning repeatedly that many of these scam alerts are vague and ineffective. And because there is no requirement for banks to disclose their individual refund rates, they can hide behind industry averages.
Of course, other organisations – not least tech giants which routinely allow fraudsters to advertise online – urgently need to be held to account too.
But banks are on the front line in the fight against fraud. They are in charge of safeguarding our cash yet allow too many suspicious payments to go through unchallenged.
So it is brilliant news the Treasury has finally committed to bringing in laws that will eliminate the current inconsistencies and force banks to compensate all victims.
The only snag is that it will be at least another year before this mandatory scheme takes effect.
Given banks this week revealed a record £1.3billion was lost to scammers last year, victims cannot afford to wait a day longer.