‘I lost £23k. One bank paid, another didn’t’
A new code is meant to give scam victims certainty, but even the banks that wrote it interpret it differently. By Marianna Hunt
Vulnerable fraud victims face dramatic differences in treatment depending on where they bank, despite the supposed implementation of a standardised rule book on refunds. Faced with the growing threat of bank transfer fraud, which led to losses of £145m in the first six months of 2018, most of which was not returned to victims, the industry has been working on a code aimed at giving certainty on when a consumer will get their money back.
Although not due to come into force until early next year, it had been understood that the banks that actively helped to shape the new code would work towards implementing the rules immediately following the publication of the first draft in September.
But Telegraph Money has discovered that banks that sat in on the meetings to shape the code are still taking radically different approaches to refunding customers who could be vulnerable.
An 84-year-old Telegraph Money reader, who wished to remain anonymous, lost £23,000 when scammers posing as her bank’s fraud team convinced her to drive to her two local banks and send money to a supposedly “safe” account. She said a well-spoken man warned her that her bank accounts had been breached by criminals and that she would need to secure her funds. She drove to branches of NatWest and Halifax and transferred £8,000 and £15,000.
“I went home relieved that I’d saved my money and had no idea I’d been lied to until I explained to my daughter what had happened three days later,” she said. “By the time I realised, the money had already disappeared from the other account.”
The incident came just a year after the death of her husband of 61 years. She said: “They caught me at a raw moment. I was very vulnerable.”
The draft code offers special protection to victims who could be particularly vulnerable to fraudsters and it makes specific mention of bereavement.
Despite this being a common type of scam, this reader said staff at both banks asked her only “one or two questions” and NatWest did not even ask her if she had received a phone call telling her to transfer money.
Following Telegraph Money’s involvement, Halifax agreed to refund her the entire £15,000. A spokesman said every case was reviewed individually but added: “In this case it’s clear that our customer was in a vulnerable situation, which led to her being duped by criminals. For this reason we have provided a full refund.”
However, NatWest said it was comfortable that its staff had followed the correct procedures and would not be refunding the £8,000 lost.
Both RBS, NatWest’s parent company, and Lloyds Banking Group, which owns Halifax, sit on the steering group tasked with developing the reimbursement code.
Although not yet bound by the rules, Telegraph Money understands that banks in the group had “individually committed to start work towards implementing the standards of the draft code”. Yet different approaches are still being taken.
A spokesman for NatWest said: “As this reader authorised the payment from her account following questioning from our branch staff as to the legitimacy of the payment, unfortunately we would not be in a position to reimburse her for her loss.”
Gareth Shaw of Which?, the consumer group, said: “While we wait for the code to be finalised we hope that banks – specifically those that helped shape the code – will live up to their commitment and begin to implement these important measures intended to protect consumers against the worsening problem of bank transfer scams.
“People are losing life-changing sums every day, so these measures to protect and reimburse all those who fall victim through no fault of their own can’t come soon enough.”
Conor Burns, the Conservative MP for Bournemouth West and chair of the parliamentary group on scams, said: “This need not be a competition between different banks about how they treat customers who have fallen victim. There should be a consistent policy that puts the protection of customers from fraudsters at the heart of bank policy.
“Front-of-house bank staff need to be trained to spot the very obvious cases of potential fraud. When a customer in their 80s comes into a branch and asks to transfer thousands of pounds, which is completely out of sync with all previous transactions, bank staff should take that customer aside and seek to establish what’s going on.”
More than 96pc of cases reported to Action Fraud, the national reporting centre, go unsolved, an investigation by Which? found earlier this year.
Meanwhile, the methods used by scammers are becoming ever more elaborate and convincing. Telegraph Money has reported on cases involving scammers impersonating financial advisers and solicitors to steal pension payments and house deposits, as well as using the names of legitimate companies to sell fake goods online.
The new rules on reimbursement, which will remain voluntary, are due to be enforced from early next year.
reader (far left) shows the impact of this type of fraud, which led to losses of £145m in the first six months of the year alone.
Without tighter rules, the code risks failing vulnerable victims. We demanded that banks should foot the bill for refunds, not consumers, and that firms that allow fraudsters to open accounts with fake paperwork should be held liable.
We also called for strict rules to force banks to act quickly after victims report a case of fraud and for the establishment of a speedy complaints process.
Hundreds of readers shared their opinions with us. This was invaluable and we included your voices in our response to the consultation.
Most tellingly, very few of you supported the introduction of a charge on bank transfers – one of the proposed fixes to the question of who will fund
Many supported new rules to make banks crosscheck the name on the recipient account, known as “confirmation of payee”.
Some of you suggested delays on large bank transfers to give victims the chance to rethink their actions, while others advocated stricter rules on the opening of bank accounts.
Jennifer Reed told us: “If a bank allows an account to be opened by a fraudster with fake ID then I think the bank should be liable for any resulting fraud.”
Phil Turnbull said a 24-hour delay on large bank transfers could help prevent fraud.
A reader from Lincoln, who did not want to be named, said the only way to force banks to act would be to make them liable for criminal charges if they failed in their duty of care to customers.
It’s been more than two years since Which?, the consumer group, raised a “supercomplaint” on transfers and finally the wheels are in motion to combat the problem. Until a workable code is finalised, we will continue to be in the corner of scam victims.
NatWest refused to play ball and refund a reader, left, who lost thousands in a scam