When crime doesn’t pay

HAVE YOU BEEN A VIC­TIM OF BANK FRAUD? THE RIGHT TO A RE­FUND VARIES DE­PEND­ING ON HOW YOU LOST THE MONEY, VICKY SHAW RE­PORTS

The Chronicle - - Your Money -

IF you lost money to a fraud, would you ex­pect to get your cash back? RBS chief ex­ec­u­tive Ross McEwan was re­cently re­ported as cau­tion­ing that vic­tims of bank fraud shouldn’t ex­pect au­to­matic re­funds, high­light­ing the duty of care con­sumers have over their own ac­tions.

So, gen­er­ally, when might you get your money back, and when could your cash dis­ap­pear for ever?

PAY­MENT SAFETY NETS

PEO­PLE’S rights vary de­pend­ing on how they lost money.

Con­sumer group Which? says peo­ple ac­ci­den­tally pay­ing a scam­mer us­ing their credit card have pro­tec­tions un­der the Con­sumer Credit Act, which al­lows them to get their money back for trans­ac­tions be­tween £100 and £30,000.

With debit cards, you may be able to get your money back through the vol­un­tary charge­back scheme with your bank.

If a pay­ment is made to a scam­mer through an au­tho­rised di­rect debit pay­ment, you’re cov­ered by the Di­rect Debit Guar­an­tee, mean­ing you could po­ten­tially have the pay­ment re­versed.

CHECK BE­FORE YOU CLICK

WHEN it comes to bank trans­fers, there’s a dif­fer­ence be­tween unauthorised and au­tho­rised trans­fers. With the lat­ter, it could be more dif­fi­cult to get your money back – as the bank has trans­ferred the money on the cus­tomer’s in­struc­tions. This makes it vi­tal to check be­fore you click the pay­ment but­ton.

Au­tho­rised trans­fer fraud hap­pens when some­one is tricked into mov­ing money from their own bank ac­count di­rectly into that of a fraud­ster.

By con­trast, with unauthorised trans­fers, the fraud­ster ac­cesses some­one’s ac­count with­out their knowl­edge and trans­fers money. In these cases, the bank is gen­er­ally re­quired to re­im­burse its cus­tomer.

Katy Worobec, head of fraud and fi­nan­cial crime preven­tion, cy­ber and data shar­ing at trade as­so­ci­a­tion UK Fi­nance, says banks take fraud ex­tremely se­ri­ously and con­tin­u­ally in­vest mil­lions in ad­vanced se­cu­rity sys­tems.

“Banks are legally obliged to ful­fil a cus­tomer’s re­quest to trans­fer money within one work­ing day even if they have warned the cus­tomer they are at risk of a po­ten­tial scam,” she says.

“All banks will act swiftly to re­cover stolen funds as soon as they are alerted to fraud tak­ing place. Cus­tomers rightly ex­pect banks to carry out trans­ac­tions they have au­tho­rised and in such cases banks will pro­vide com­pen­sa­tion on a case-by-case ba­sis.

“Where a cus­tomer has not au­tho­rised a trans­ac­tion, they will nor­mally re­ceive a re­fund.”

She says vic­tims of scams should con­tact their bank im­me­di­ately.

But Which? ar­gues fi­nan­cial firms could do more to shoul­der the bur­den when peo­ple are tricked into trans­fer­ring cash to a fraud­ster. It made a su­per-com­plaint to fi­nan­cial reg­u­la­tors about the is­sue last year.

Gareth Shaw, Which? money ex­pert, says: “Banks are still plac­ing too much re­spon­si­bil­ity on con­sumers to spot and pro­tect them­selves from so­phis­ti­cated on­line scams.

“We’ve heard from many peo­ple who have lost life-chang­ing amounts of money through bank trans­fer fraud, through no fault of their own, who are un­likely to get their money back from the banks in­volved and who have seen lit­tle ac­tion to help them.”

He warns: “If the ac­count holder has been tricked into mak­ing a bank trans­fer them­selves to a fraud­ster’s ac­count, even if they can show they have been a vic­tim of a scam, there are fewer le­gal pro­tec­tions in place and the bank or build­ing so­ci­ety is not obliged to re­fund the vic­tim.”

WHAT IF YOU CAN’T AGREE WITH YOUR FI­NAN­CIAL FIRM?

WHICH? sug­gests that if your bank is dis­put­ing you’ve been a vic­tim of fraud, you can ask for your claim to be es­ca­lated through its in­ter­nal com­plaints process.

If your bank has made up its mind, you could ask to be is­sued with a fi­nal let­ter of dead­lock and then re­fer your claim to the Fi­nan­cial Om­buds­man Ser­vice (FOS), which re­solves dis­putes be­tween con­sumers and fi­nan­cial firms. Which? has a tem­plate let­ter of dead­lock re­quest at tiny.cc/ WhichLet­terDead­lock

HOW TO AVOID SCAMS

COM­MON warn­ing signs in­clude un­ex­pected emails or calls, be­ing put un­der pres­sure to act quickly and be­ing asked for per­sonal de­tails. If in doubt, put the phone down.

And ev­ery­one can do their bit, by not shar­ing pass­words and pins with any­one else, check­ing state­ments reg­u­larly and re­port­ing fraud im­me­di­ately to banks and the po­lice.

Make sure the per­son you are trans­fer­ring money to is le­git­i­mate

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