Banks slammed for refusing to hand back millions to fraud victims
INNOCENT Brits lost almost £147million to bank transfer fraud in the first half of this year, yet only 17 per cent was refunded.
It comes as major banks still haven’t signed up to a voluntary scam code, which came into force on May 28.
The latest fraud data from banking trade body UK Finance shows that 53,475 victims lost a total of £146.5million in so-called authorised push payment (APP) fraud in the six months to the end of June.
This is much higher than the £92.9million lost in the first half of 2018, although UK Finance says the figures aren’t comparable as more banks have started reporting fraud cases while an increasing number of customers are doing the same.
But what’s more damning is that just £26.5million (17 per cent) was refunded to victims.
In the first half of 2018, £15.4million was refunded, which was also 17 per cent of the total cash stolen.
Banks that have signed up so far
CUSTOMERS of these banks are protected if they're victims of balance transfer scams.
- Bank of Scotland
- Barclays
- Cahoot
- Carter Allen
- First Direct
- Halifax
- HSBC
- Intelligent Finance
- Lloyds Bank
- M&S Bank
- Metro Bank
- Nationwide Building Society
- NatWest
- Royal Bank of Scotland
- Santander
- Starling Bank
- Ulster Bank
Banks don’t have to refund victims of transfer fraud, which is where customers are tricked into transferring money directly to crooks, as they can claim customers are responsible.
But customers of banks signed up to a new scams code who fall victim will be reimbursed, provided they can prove that they believed the transaction was legitimate.
Major providers that have signed up to the code include Barclays, HSBC, Lloyds Banking Group, NatWest and RBS, Santander, and Nationwide Building Society.
These cover 85 per cent of all balance transfer fraud transactions, according to UK Finance.
Yet customers with providers such as Bank of Ireland, Citibank, Clydesdale Bank, Co-op Bank, Monzo, Post Office Money, Tesco Bank, Virgin Money and Yorkshire Bank risk being left out of pocket as the banks still haven’t signed up.
They’ve all said they’re working to do so, but Tesco Bank and Bank of Ireland, which is also Post Office Money’s financial services partner, couldn’t clarify a date when contacted by The Sun today.
The other providers haven’t yet got back to us, so we’ll update this article if we get a response.
Meanwhile, Danske Bank, First Trust Bank and N26 said last month they’re assessing what it’d involve to sign up but they’re yet to reveal their decisions.
How to protect yourself from fraudsters
ACTION Fraud recommends taking the following advice to stay safe:
- When making a purchase, be suspicious of any requests to pay by bank transfer or virtual currency instead of safer methods, such as credit card or payment services such as PayPal.
- Listen to your instincts: If something feels wrong then it is usually right to question it. Don’t pay for goods or services unless you know and trust the individual or business.
- Personal information obtained from data breaches is making it increasingly easier for fraudsters to create highly targeted phishing messages and calls – watch out for these.
- You shouldn’t assume the caller is genuine just because they’re able to provide some basic details about you.
- Always be suspicious of unsolicited requests for your personal or financial information.
Customers who were scammed before May 28 also face being left out of pocket as the new code only covers fraud that took place after it was introduced.
A few months ago, The Sun spoke to one disabled mum who lost £1,300 after crooks posed as Barclays’ fraud team – and the bank won’t pay her back as it happened a week before the code came into effect.
Jenny Ross, Which? Money Editor, said: “The alarming rise of bank transfer fraud – with huge losses and little progress made returning money to victims – shows why the new banking industry code is so important and must deliver results.
“In force since the end of May, it promises better protection for fraud victims, and must lead to a significant increase in the amount of money being reimbursed to victims of these sophisticated scams.
“The banking industry must now urgently ensure that reimbursement for blameless victims continues beyond the end of this year.
“It is unthinkable that some innocent people could once again be exposed to the threat of losing their life savings to this devastating crime.”
While Katy Worobec, managing director of economic crime at UK Finance, said: “The finance industry is constantly investing in advanced security systems to protect customers from this threat, while helping law enforcement to apprehend and disrupt the criminals responsible.
“But criminals are continuing to exploit vulnerabilities outside the financial sector to obtain customers’ data that is then used to commit fraud.
“We all have a responsibility to work together, including online retailers and social media companies, to beat the fraudsters and keep customers’ data secure.”
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