New research by consumer group, Which? has found that some fraud victims are being left without satisfactory support from banks.
The research found that while 83% of victims of fraud or fraud attempts in the past 12 months said they were satisfied overall with how their bank had managed the incident, some customers struggled to contact their bank after a scam.
It also indicated that 15% of people who reported fraud to their bank via phone or web chat waited 30 minutes or more to speak to someone, while 32% said their bank did not offer advice or resources to help better protect themselves in the future. While more than 8 in 10 people said they were satisfied with their bank’s efforts, Which? says this left a significant number potentially ‘slipping through the cracks;, pointing to analysis suggesting that the number of fraud offences in the year to March stood at 4.6 million.
Which? surveyed more than 400 people who had been victims of fraud or attempted fraud in the last 12 months, eight in 10 (83%) said they were satisfied overall with how their bank managed the incident. But that still leaves a significant number of victims potentially slipping through the cracks and getting substandard treatment, considering the Office for National Statistics estimates that for the year ending March 2021 there were 4.6 million fraud offences.
The consumer champion also found that a third (32 per cent) of victims of fraud or attempted fraud said that their bank did not offer advice or resources to help them better protect themselves in the future.
The figures come amid growing concerns over ‘recovery fraud’ – where victims are scammed again by fraudsters pretending to help them recoup their losses. This type of fraud has seen a 39 per cent increase since last year, with victims losing a shocking £14,408 on average.
Which? contacted banks representing 98 per cent of the customers surveyed to ask them what protocols they had in place for victims of fraud. All of them said that they offer advice or guidance in some form or other – but the findings of Which?’s survey highlight concerns about whether this information is reaching consumers and how effective it is at preventing scams.
The entitlement to a refund depends on the type of fraud that a person falls victim to. In the case of unauthorised fraud – where money is taken from an account without permission (for example, a card is stolen and used to make online purchases) – a debit or credit card provider must refund you unless they can prove that you’ve been grossly negligent or acted fraudulently.
Consumers tricked into sending money to a scammer – known as authorised push payment (APP) fraud or bank transfer fraud – there is no such legal protection against losses.
Most major banks have signed up to a voluntary reimbursement code on bank transfer scams which not only instructs them to reimburse customers who are not at fault, but also to provide them with adequate support.
However, firms signed up to the code have been criticised for how they are providing support to customers. A recent report by the Lending Standards Board (LSB) found that some firms were failing to meet the requirements of providing a response on reimbursement claims within 15 days, or 35 days in ‘exceptional circumstances’.
To make matters worse, the LSB said there was little evidence in these cases of firms providing any updates to the customer about the delay and when they could eventually expect a decision.
Which? is calling for the voluntary code on bank transfer scams to be replaced with a mandatory reimbursement scheme, which will include stronger protections against bank transfer fraud for consumers, and tough enforcement against firms that break the rules.
In order to achieve this, the government should grant the Payments System Regulator the powers it needs to make changes through the Faster Payments system.
As the information about how banks handle cases of bank transfer fraud is currently anonymous, Which? is also calling for the regulator to introduce greater transparency so customers can clearly see how their bank chooses to treat victims of crime.
Jenny Ross, Which? Money Editor, said “Fraud can have a devastating impact on victims. When banks fail to offer proper support, it can make a nightmare situation even worse, and an absence of information from firms about how people can protect themselves could even lead to ruthless scammers striking for a second time.
“The lack of help provided to some victims of bank transfer scams is particularly concerning, and protections for this type of fraud have to be strengthened.
“The payments regulator must introduce a mandatory reimbursement scheme for all payment providers, to ensure that customers are treated fairly and consistently when applying to get their money back.”
In response to the research, a spokesperson from UK Finance said “A total of £188.3m has been reimbursed since the voluntary code was introduced in May 2019. However, we agree more needs to be done and we firmly believe a regulated code, backed by legislation, is the most effective answer so consumer protections apply consistently across the banking industry.”