/ Money

Update: Do you support our super-complaint on scams?

Bank transfer scams image

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?

Kit S says:
21 December 2016

Scenario 1: A bank makes a mistake – the mistake of paying some money into your bank account. The bank realises the mistake, and asks for the money back. Can you refuse? No. You are not allowed to keep the money – you must pay it back.
Scenario 2: A victim of fraud makes a mistake – the mistake of paying money into the fraudster’s bank account. The victim realises the mistake, and asks for the money back. The fraudster’s bank asks the fraudster to return the money. Can the fraudster refuse? Yes. (This happens all the time, hence the super complaint). The banks have prioritised the fraudster’s instructions over the victims, and the fraudster keeps the money.

Profile photo of KitS

I worked for over 20 years in a bank. Banks have a duty of care to protect customers from loss. In my opinion, the fraudster’s bank should be the one liable for the loss of money obtained by deception. A fraudster will either need genuine ID to open a bank account, in which case the fraudster can be traced and prosecuted. Or, the fraudster will use fake ID, which the bank should spot and reject. A fraudster can’t scam a victim out of money if they don’t have a bank account to receive the money. Banks have security checks in place to prevent accounts being opened fraudulently, or for fraudulent purposes. If a fraudster opens a bank account, it means that the bank has failed to complete the appropriate security checks. The bank’s inability to prevent the fraudster’s account being opened or being used for suspicious activity facilitates the crime, hence it should held be responsible for the victim’s loss. If banks know they will be responsible for the loss, they will be more diligent in identifying fraudsters at the application stage.

Elizabeth Astley says:
21 December 2016

Hi I was scammed out of £8,200 from an advert in my local press have been down all the routs open to me to try and reclaim my money banks should be liable as even with proof from metropoleten police that the account I paid money to was opened by a person who was not registered at address given or indeed in this country so Barclays opening bank account policy’s are not very effective and financial ombudsman won’t do anything unless the grievance is with the bank you hold accounts with anything I can do I will I hope that the banks will be made to account for their shortfalls in opening of mule bank account s

Reg Parker says:
18 January 2017

After being caught in a scam in which I was sent headed notepaper of a fake company, it’s name differing by only one word from that of a genuine one, as money goes through the banks, could they not program the names of real companies, so that the fakes are identified and banks have an agreed response to identify and locate potential fraudsters. A watching brief is possible, via databanks, but specific regulation and response mechanisms all need to be devised and function. Their must be penalties even for intention to defraud, otherwise it is attractive. Did not HM Govt cut their watch on scams to save our money? That, too, could be argued for reinstatement.

Deirdre says:
1 February 2017

My mother who is 79 years of age, was scammed out of £11,000 by an unsolicited caller.
It was only by good fortune that they didn’t get the rest of her life savings.
She heard a radio programme about these scams just before she transferred the rest of her savings.
While the police and bank have gone through the motions of being helpful and sympathetic, she’s lost her money.
When I went on holidays to Peru recently and tried to use my Credit Card, I was blocked.
Why? Because if the card was being used fraudulently, the bank was at risk of being liable!!!
So why, oh why do the banks not look at an extremely unusual bank transfer in the same way??
Because they are not liable and really don’t give a sugar?
All that needs to happen is that if an unusual transaction is flagged up, that questions are asked and a time-lapse is enacted.

Jasper Lawrence says:
29 March 2017

Banks basic function is to keep their depositors’ money safe. The only reason I have a bank account is to store my money, Visa and MasterCard can syphon my money out of any repository to enable me to easily spend it. They are separate from the banks.

They use “business intelligence” (BI) software and appliances to milk every penny out of us by recording our transaction characteristics to enable them to offer us products and services based on the patterns and characteristics these systems track.

They are capable of stopping my card if I go over their limit, a limit conveniently beyond the one I agreed to when I signed up by the way, which they allow for a fee on each and every transaction they choose to allow. they seem able to stop me spending more money very precisely when it suits them and their fees, but not when it suits me.

Fraudsters, those that are not banks clearly, should be as easy for the banks to detect, as well as transaction types commonly associated with fraud as it is for them to target us based on our spending patterns, etc. How is it that an OAP can possibly be allowed to transfer the ENTIRE contents of their account, probably using a method like online banking or telephone banking they do not commonly (in some cases have never used) use, to a third party account in one go?

To claim no responsibility in these types of situations is insulting to our intelligence. It shows that their predatory cultures, that lead to Libor fixing, market collusion on interest rates, wholesale money laundering, PPI lying and fraud, etc., etc, etc., are still in place.

Protect our money you jerks, it’s what we pay you for, and when you blow it own it and compensate those whose money you allowed to be stolen. It isn’t like making sure retirees aren’t ruined by your lax standards and procedures is going to materially affect your multimillion annual bonuses, is it?

The nerve of these people.

Jeanne says:
7 April 2017

I understand that under current law, banks are strictly liable for all losses due to debit card crime. The law should also make them strictly liable for refunding money taken out of their customers’ accounts by scammers. In most cases scams originate through information obtained by fraudsters who have gained unlawful access to information about their victims through access to cards and other banking information, so the law relating to cards should be extended to cover bank transfer scams.

A. James says:
16 May 2017

Regarding Debit Cards, I found that when I wanted to cancel a Debit Card DD arrangement with the bank they refused, saying only the beneficiary of the DD could do so. The trader was OK and complied with my request, so all was well, but had the trader been a fraudster I’d have had no control over my own account.

Himanshu Sharma says:
28 April 2017

https://newage-bank.com. registered as NEW AGE BITCOIN LTD has done very big scam. On this website any individual can invest in the form of Bitcoins by purchasing different cards with different validity periods. Rate of return on buying these cards was ranging from 200%-500%. That means anyone whosoever invests can double, triple or multiply their Bitcoins by 5 times based on different validity hold on that investments.

Now this company has given these returns for almost more than 45 days. All of sudden on the eve of Good Friday on 14th April, 2017 they have stopped giving withdrawals. People have thought this might be a temporary issue with the website. So it would get recovered. However on 21st April, 2017 their website got disappeared. Now here is not the end of this scam story. People are even taking an advantage of this situation to do more scam by building another website & gaining money from public to get their refunds.

Now I have tried to report this to Action Fraud. Their support advisers have confirmed that they cannot help in reporting this issue. They suggested me to this website. Now Aleksandra from Support has given me this link. Being a Non-citizen of UK they cannot help me. I am not sure what I am suppose to do. Because suspect is a resident of UK.

As per the details has been supplied by suspect on their website https://newage-bank.com.

Company Registered Address:
68 Hatton Garden, London, United Kingdom, EC1N 8JY

Director of Company (KAI WALLIS) Address:
428 Southcroft Road, Streatham, London, United Kingdom, SW16 6QX

Contact # +442070433810

I have dependent old parents. I have lost my job. Have kept my savings with them thinking that would help me to sustain for some period unless I get good job. Feeling helpless & cheated. Don’t know what to do & I am sure that I am not alone. There would be certainly poor UK residents who must have also got caught by these fraudsters.

a.hall says:
21 May 2017

We have just been paid compensation for PPI Insurance Policies we knew Nothing about. Halifax, Bradford and Bingley, and Cheltenham and Gloucester. But mainly the Halifax. We took out one PPI Policy and were paid for Seven we knew Nothing about.
NO Bank has been Prosecuted for PPI. Mis-Selling Balderdash; it is Fraud.