Nearly half (48%) UK consumers incorrectly believe they are protected by their bank from authorised transfer fraud, according to the Shieldpay Fraud Tracker.

The research from secure payments provider, Shieldpay also reveals a further two in five (38%) people do not know how or if they are protected from this type of scam. Of the people that incorrectly believe they are protected; 13% think they are fully protected by their bank, 13% believe it is at their bank’s discretion as to how much they will protect and 22% think they are protected up to a certain limit. Just 8% of people know that they are not protected at all, with banks having no legal obligation to recover funds on behalf of its customers.

Authorised transfer fraud happens when someone is tricked into moving money from their own bank account directly into that of a fraudster. UK Finance data on authorised transfer fraud shows there were 34,128 cases and total losses of £145.4 million in H1 2018. Even though banks are not legally obliged to recover the money they do attempt to recover the money in some cases – £30.9 million was returned to the customer.

Despite misunderstanding what protection banks do provide, the majority of people (43%) do believe they are responsible for ensuring a person or company is legitimate when making payments online.

People are also aware of the risks associated with transferring money directly to a seller. Nearly half (49%) of consumers have been put off from buying an item online because the buyer wanted them to transfer the money directly into their account, 15% bought the item anyway, while 34% did not go ahead with the purchase. Worryingly, despite the risks, 51% would not be put off from making a transfer in this way.

Tom Clementson, Director of Consumer & SMB, at Shieldpay said “There is clearly confusion amongst consumers about the protection they receive from their bank against authorised transfer fraud. More needs to be done to raise awareness of the risks associated with transferring money directly to someone you don’t know. While banks do a great deal to protect their customers people should not solely rely on them to protect them when buying and selling online.”

“Before entering into any transaction online people should consider a way to do this safely and securely. At Shieldpay we have developed a secure payment solution, that allows people to pay anyone, anywhere with total confidence.”