Five years since our super-complaint to the regulator highlighting the risk to consumers from authorised push payment (APP) scams, victims are still being let down.
Becoming the victim of an APP scam – when you’re tricked into sending a scammer your money – can have a devastating financial and emotional impact.
Scammers’ tactics are becoming ever-more sophisticated; they can spoof phone numbers, post fraudulent adverts online and send thousands of phishing emails at the press of a button. The Financial Ombudsman Service (FOS), legal standards and scam experts all agree that the vast majority of the time it hasn’t been a consumer’s fault when they’ve been scammed.
Despite Which?’s super-complaint in 2016 leading to a voluntary code for banks to sign up to, that was supposed to increase protections for consumers and lead to a fairer system for reimbursement of victims, losses to bank transfer scams remain high (£479 million in 2020) and reimbursement rates remain shockingly low.
Unpredictable and unrealistic expectations
Five years on, whilst you’re now more likely to get your money back if you are scammed, most scam victims are still out of pocket thanks to the unpredictable and unrealistic expectations of the banks who are meant to protect them:
🔹 Banks found victims at least partly responsible for their losses in 77% of cases assessed in the first 14 months of the code.
🔹 Two banks found the customer fully liable in more than nine in 10 decisions.
On top of this, a new Which? investigation has revealed the appalling treatment some scam victims are suffering at the hands of their bank.
In one instance, a Lloyds customer was initially denied reimbursement for £64,000 after receiving a text from a fraudster claiming to be from her bank asking to verify a transaction by calling the phone number supplied. As it was not unusual for her bank to send similar texts, she did so and was immediately entangled in a scam.
The fraudster quickly established trust, telling the victim he would order a new debit card and persuading her to download a remote access app called AnyDesk to ‘secure her account’. It came to light that the fraudster had made 14 payments in total and only £4,057 was reclaimed from the receiving banks (TSB and Wise).
An opportunity for change
It’s clear that mandatory minimum levels of protection for consumers are what’s needed. Which? is urging strong and swift action from the regulator – the Payment Systems Regulator (PSR) – to ensure banks do more to protect consumers and treat customers fairly and consistently.
In a fairer world, fraudsters would be caught and forced to repay the victims of their crimes, but the harsh reality is that while scam reports are up, convictions are down.
What’s more, banks are all too often pinning the blame for losses on victims. The only way to properly protect consumers is for the regulator to take strong action to make sure that customers are better protected from APP scams, and are treated fairly and consistently when applying to get their money back.
Have you experienced poor treatment at the hands of your bank, or struggled to get reimbursed, when you’ve been the victim of a bank transfer scam? Let us know in the comments.