Call for new law on bank transfer victims

People who are tricked into transferring money to a fraudster should have similar protections to crime victims whose money is stolen from their bank account without their knowledge, according to Which?

The consumer group argued that the way banks apply a voluntary reimbursement code when people are tricked into making an authorised bank transfer to a fraudster is “riddled with chronic problems”, and victims are not getting the safeguards they need.

Which? said the Payment Systems Regulator (PSR) should be given new powers to make it mandatory for all firms to reimburse customers who have acted appropriately.

It said this would mean standards of protections would be similar to unauthorised fraud, such as when someone loses money after their identity is stolen, where there are clear expectations on when customers should get their money back.

Fraud victims whose money has been moved from their bank account without their knowledge can generally expect to be reimbursed unless they have acted in a very negligent way.

Which? argued: “This would abolish the reimbursement lottery that leaves a victim’s chances of getting their money back dependent on where they bank.”

Which? said less than half of the money lost to this type of crime is currently returned to victims, with banks routinely blaming customers for falling for what can be highly sophisticated crimes.

Gareth Shaw, head of money at Which?, said the PSR must “take matters into its own hands by writing new rules making it mandatory for all firms to reimburse victims when they are not at fault”.