Banks ‘still failing to repay victims of online scams despite adopting code of conduct’

BANKS are still not repaying customers who fall victim to scammers, despite signing up to a new code, because they deem them careless.

The banks had promised to refund innocent people tricked into transferring money, but an investigation by consumer group Which? found some were being unfairly denied.

In a bid to stem the tide of bank transfer fraud, which cost 60,000 consumers £207.5million in the first six months of last year, banks have introduced pop-up warnings when sending money to a new payee.

These warnings have been branded “useless” by experts who say they do little to prevent people from falling for scams and some banks use them as an excuse not to refund their customers.

Richard Emery, of investigation firm 4Keys, said: “The banks are trying to say that customers are careless if they ignore fraud warnings, but the warnings they provide are not sufficient.”

A loophole in the voluntary code of conduct introduced in May allows banks to refuse compensation if they have provided “effective” warnings about fraud.

But experts have questioned the usefulness of the warning messages.

A source at one bank said: “You can put a pop-up on the screen but if the customer genuinely believes they are paying a trusted figure then it won’t stop that happening. You should definitely have the warnings there, but I don’t think you should be blaming customers if they still fall victim.”

Dr Dimitrios Tsivrikos, a psychologist at University College London, said the warnings looked so similar to advertisements that people tended to disregard them as spam.

However, a spokesman for UK Finance said that the code gave “significantly increased levels of protection for customers”.

♦the decline of current accounts offering “golden hellos” will lead to a fall in people switching banks, it has been predicted, with experts saying customers will only move on in the event of a “major mistake”.