How safe is your cash from fraud in the leading banks?
TSB has made a firm cash pledge to customers so...
TSB is the bank that likes to say ‘no’ to fraud. But since it cannot guarantee to stop the crooks, it has pledged that customers who fall victim will at least not have to foot the bill. ‘We will refund the money they lost from their account,’ it declares in its multi-million pound advertising campaign promoting its new fraud guarantee refund.
The bank is the first to take such a bold stance. Sceptics believe it is a public relations stunt to help draw a veil over an IT crash last year that l eft millions of customer accounts at risk of fraud.
But others are more encouraged – with caveats. Andrew Hagger, of f i nancial consultancy Moneycomms, says: ‘It’s a positive move and a brave one as I’m sure there will be criminal gangs looking for ways to try to exploit this fraud promise. So TSB will need to be on its mettle to ensure fraudsters aren’t colluding with customers.’
Martyn James, of complaints service Resolver, says: ‘ TSB is doing a brave thing. But most customers we speak to also want the fraudsters to be brought to justice. TSB has said it is investing more in anti-fraud measures. It is time to put pressure on the other banks to do the same.’
But what are TSB’s rivals prepared to do? Most intend to or have already signed up to a voluntary code – which goes live from the end of next month – to help get refunds more easily and quickly for customers who are unwittingly taken in by authorised ‘push payment’ scams. These scams involve a fraudster tricking a victim into authorising the transfer of money directly to their account. The money often ends up abroad, where it is almost impossible to trace.
Victims can struggle to be reimbursed because they have ‘authori sed’ t he t ransfer. Banks are required to return funds only if the customer did not approve the transaction. But the new code should bring relief to more victims who innocently fall for sophisticated tactics – though if they show negligence or ignore warnings, their claims will be rejected.
Authorised bank transfer tricks cost 84,000 victims a total of £ 354 million last year. Common methods for duping victims include tricking homebuyers into sending deposits to fabricated solicitor bank accounts, getting holidaymakers to pay for rentals on holiday villas that do not exist and using fake telecoms engineers to take over online bank accounts by pretending there is a fault with a customer’s broadband.
One of the first customers to be protected by the TSB guarantee is Richard Sailing from Wrexham, North Wales, who was defrauded of £11,000 via a push payment scam two weeks ago.
He was called by a man claiming to be from BT. Richard (his name has been changed to protect his identity) says: ‘The caller told me an error had been made when installing new routers and they wanted to put this right and at the same time refund me £350.’
The caller asked him to log on to his laptop and download new software for the routers. As a longstanding BT customer, Richard had no reason to doubt the caller’s motives. After giving him access to his laptop, Richard, 67, was then
told to log on to his online bank account so he could receive the £350 compensation. The computer screen went blank a number of times – which it transpired was the scammer secretly carrying out activity on his account online. The caller also transferred an incorrect amount – £5,350 – so that Richard would have to refund him, making it appear that the receiving bank account was genuine when later £ 11,000 in fraudulent transfers were made.
After a phone call from his bank, Richard visited his local branch the next day to discuss what the manager thought were suspicious transfers. Richard realised then he had been scammed. He says: ‘ I was shell shocked.’ But he was refunded in full within a week – and given advice on how to stay safe in future.
He says: ‘ I don’t feel stupid because these people were so convincing. But I am now more careful about answering the phone and ignore numbers I don’t recognise. I plan to do future banking transactions at my branch.’
But such scams are just the tip of the iceberg. Total banking fraud losses topped £1.2 billion last year, so there is more work to be done.
Though TSB is the only bank offering a fraud refund guarantee – no matter what kind of fraud you fall victim to – The Mail on Sunday asked other banks what additional safeguards they were applying.
Having cut through the jargon and corporate-speak, it does not make for hugely reassuring reading. Most banks simply pointed to their support of the new push payment code, while others spoke of investigating each claim on its own merits – suggesting that there will be no automatic or easy resolution for victims. Their responses are summarised in the panel above.
Several highlighted how customers need to take more action to protect themselves and as such support the likes of the Take Five industry campaign, which encourages individuals to think before accepting instructions about their finances out of the blue. Their message appears to be that the onus of responsibility remains with the customer.