Imagine this: You’ve had some building work done on your house and you’re arranging to pay the builder. Then you receive an email from your builder informing you that their bank account details have changed…
You transfer the money to them.
Later on, you find out the email was from a fraudster.
They had made their email virtually identical to the ones that you’d received from the builders before. You’ve been scammed – and you’ve got no right to get your money back from your bank.
Bank transfer scams super-complaint
Which? is using its legal powers to make a super-complaint to one of the financial regulators – the Payment Systems Regulator (PSR). We think banks need to do more to protect customers who are tricked into transferring money to a fraudster.
Some people might well think ‘that’ll never happen to me!’ They might say that people who are scammed should simply get better at protecting themselves.
But it’s an issue that comes up time and time again, with some people getting conned out of their life savings.
You only have to read the harrowing real life stories in our super-complaint to realise that these scams are often so sophisticated that it’s impossible for people to be savvy enough to completely protect themselves. And the people being scammed are not only the stereotypical vulnerable groups; they are often financially and technologically literate.
When we asked over 1,000 members of the public if they could spot the difference between real and spoof emails, we found that 50% of people were fooled by these sophisticated scams. Ultimately, people can only protect themselves so far, and with scams on the rise, we all need greater protection.
So what do we want?
Which? thinks banks should shoulder more responsibility for money lost to bank transfer scams. It’s unfair that customers who lose money due to scams via direct debit or credit and debit cards are reimbursed, for example, but not bank transfers. This would give banks an incentive to develop better mechanisms to prevent the fraud in the first place.
Update: 12 October
Alex Neill, our Director of Home and Legal Services, appeared on Rip Off Britain this morning (12 October) to talk about what action is needed to protect us all from scams.
After hearing the tragic tale of a scam victim who was tricked into transferring £77,000 to scammers posing as solicitors, Alex explained how banks can and must go beyond just protecting themselves from paying out against scams.
Banks already protect their customers for credit and debit card fraud, but there’s clearly need for them to improve their security processes to protect their customers from bank transfer scams.
That’s why we’ve made our super-complaint to the Payment Systems Regulator [PSR] . If you were tricked into transferring money from your account to a scammers’ account then you have no legal right to get you money back from your bank.
The PSR now has 70 days remaining to respond to our super-complaint.
Clearly, this is a complex issue. This is why we need financial regulators – not just the PSR but also the Financial Conduct Authority (FCA) – to work together and address our concerns.
What would you like to see the regulators do to help prevent fraud?
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