£1MILLION-A-DAY BANK SCAMMERS PREYING ON YOU
Revealed: Shock rise in online account holders tricked into sending thousands to criminals . . . but banks blame victims
Customers are losing up to £1million a day in bank transfer scams.
Figures released yesterday reveal the scale of the fraud epidemic. In the first six months of the year £145million went missing – almost £1million a day and 50 per cent more than in the same period of 2017.
The true figure for ‘ authorised push payment fraud’ is thought to be even higher. Banks often refuse refunds, blaming customers for approving the transfers.
Politicians and consumer champions say the figures are alarming and called for more protection – as well as compensation – for victims.
Today MoneyMail launches a major campaign for fairer treatment for those tricked by criminals. Some have lost their life savings.
Banks logged 34,128 cases of push payment fraud in the year to July – a rate of almost 200 a day. Just £31million of the stolen £145million was returned to customers, according to trade body UK Finance.
The payments watchdog is expected to publish new rules this week spelling out when victims should be reimbursed. It is expected to say that those who have taken reasonable care should not be left out of pocket.
Wes Streeting, a Labour member of the Commons Treasury committee, says: ‘The rate of fraud is increasing at an alarming rate and in the vast majority of cases victims never see
their money again. It’s wholly unacceptable. All of us must take personal responsibility for protecting ourselves against fraud, but banks must also acknowledge that scams are becoming more sophisticated.
‘There should be a compensation scheme to help victims.’
Martyn James, of the complaints service Resolver, said: ‘What’s most troubling about these figures is the fact that they only cover fraud that’s been reported. Therefore they’re only the tip of the iceberg.
‘Given that countless people don’t report being defrauded it’s likely that well over a million pounds a day – and maybe more – is being stolen from British people by increasingly sophisticated fraudsters.’
The figures show for the first time the amount of money lost to different types of scams. Around a quarter of the total losses – £36.6million – was a result of impersonation fraud. This is where
‘Quick to blame customers’
crooks pose as companies people trust such as their bank, solicitor, telecoms provider, HMRC or the police. Victims are then convinced to transfer their money into another account under the guise of keeping it safe. They almost never see it again.
Others are tricked into making payments to criminals posing as conveyancing solicitors, builders and other tradespeople.
Rushanara Ali, another Labour member of the Treasury committee, said: ‘ Banks have often been too quick to blame their customers for failing to spot fraudulent activity. They, along with the Government, should also recognise their responsibilities and invest more in financial education to help people make better informed decisions.’
Unauthorised fraud losses, where crooks have hacked into your account or used your bank card without your knowledge, are down slightly at £358million for the first six months of 2018.
In these cases victims are typically refunded unless they have been negligent with their password or PIN.
Experts warn that banks are not acting quickly enough when alerted to potential fraud or doing enough to prevent criminals opening bank accounts.
Earlier this year the Payments Systems Regulator set up a steering group to establish clear rules on how fraud victims should be treated.
It is considering automatic refunds for customers whose banks are at fault. It is also examining whether banks should be forced to set up a central compensation fund for fraud victims.
Gareth Shaw, an expert at Which? Money, said: ‘Consumers continue to lose life-changing sums of money with few protections as more and more of us are encouraged to do our banking online.
‘The regulator and industry must now seize the opportunity to introduce a reimbursement scheme that delivers for victims of push- payment scams who have lost money through no fault of their own. But ultimately, banks should be doing much more to protect their customers against scams in the first place.’
Banks claim that they have invested millions of pounds in technology that allows them to identify potential criminal activity and now employ teams of dedicated investigators. They are calling on other sectors to play their part by doing more to secure people’s personal data.
In its report published yesterday, UK Finance warned that data breaches from online businesses, retailers and utilities are a major contributor to fraud.
Criminals use this stolen information to target individside uals through what is known as social engineering.
Stephen Jones, chief executive of UK Finance, said: ‘Enough is enough – payment fraud is a crime, it has victims and it fuels organised criminal activity. And increasingly it is being driven by breaches of customer data security out- the banking and payments sector.
‘Our members across the banking and payments industry are working tirelessly to tackle this scourge on our society but cannot defeat the criminals on their own.
‘Any organisation that holds customer data, whether in the retail, utility, travel or other sectors has a duty to ensure that this data doesn’t fall into the hands of thieves.
‘The banking and payments industry is already working closely with government and law enforcement to take up this challenge but we now need all industries to make this a priority too, stepping up to help us stamp payment fraud out.’
A spokesman for the Payment Systems Regulator, said: ‘We want to make it harder for criminals to commit this type of crime – and if they do occur, we want to reduce the impact on the victim. We’re driving a range of initiatives to do this, working with industry, consumer groups and other regulatory and government bodies.’
Baroness Ros Altmann, a former pensions minister, said it was worrying that customers were being exposed to fraud. She added: ‘Banks want people to move to online accounts but so far there has not been sufficient emphasis on ensuring their money is safe from clever criminals.’
‘Tackle this scourge’