/ Money

Update: stopping bank transfer scams – what would meaningful action look like?

Our research has found that people are still losing life-changing sums of money to fraudsters exploiting bank transfer payments. So, how much longer should we wait for effective action from industry?

Update: 28/02/19

Several major banks have signed up to a new code that will ensure refunds for thousands of victims of bank transfer scams.

In a huge win for our campaign, seven major banks have signed the code that ensures refunds for victims of bank transfer scams, and greater protection for all their customers. The banks who have signed up are:

■ Barclays

■ Lloyds Banking Group


■ Metro Bank

■ Royal Bank of Scotland

■ Santander

■ Nationwide

These banks will begin a new reimbursement scheme for customers who have lost money through bank transfer scams on 28 May this year.

The new code requires banks, building societies and other payment services providers to put more measures in place to protect customers from bank transfer fraud – and, crucially, enables victims of this type of scam to get their losses refunded by their bank if they have done nothing wrong. But the code is only voluntary.

There’s still more work to be done. In the last two years alone £400m has been lost to bank transfer scams – and we want customers of all banks to be protected.

We’ll be turning up the pressure on the banks who haven’t signed up to the code in the coming months to demand they get on board and protect their customers.

Stop scams

Two years ago, as part of our super-complaint to the Payment Systems Regulator, we collected evidence from nearly 600 victims of fraud who told us they’d collectively lost over £5.5m to bank transfer scams.

Five months on from the PSR’s response saying that they’d found evidence that banks could be doing more, we’ve been checking to see if anything has changed.

We’ve found that people are still exposed when it comes to bank transfer scams, with many losing significant sums of money.

Despite fraudsters continuing to exploit bank transfer scams, we’ve not seen enough evidence that banks are making progress to protect their customers.

Roger and his wife lost £2,000 to a scammer posing as their gardener:

And cases like Roger’s are far from unique. In fact, our latest research reveals that one in 10 people in the UK had made a bank transfer, or knew someone that had made a payment, that later turned out to be to a fraudster. And of those people who had lost money to bank transfer scams, more than half had been victims in the last six months.

Huge sums of money are being lost to these fraudsters, and we found that nearly four in 10 didn’t get any money back at all.

So, today we’ve written to banks calling for them to clearly outline what action they are taking to safeguard consumers from bank transfer scams.

Bank scams

When it comes to banking the general expectation is that banks will look after you as their customer and your money too. But with so many continuing to lose such large sums of money to fraudsters exploiting the system, it’s clear more needs to be done.

The industry, regulator and next government need to urgently take action to tackle financial fraud. We want the next government to set out an ambitious plan to ensure that financial institutions do more to protect consumers from bank transfer scams.

We need your help to do this – please share your scams experiences with us and help keep the pressure on to deliver this change.

Tell us your scams story

Confirmation of Payee plans announced

Update, 11 December: The Payments Strategy Forum has outlined plans for a new payments system architecture in the UK.

One area that the Forum has been examining is ‘Confirmation of Payee’. Currently, when you make a payment to someone the bank will check that the account number and sort code you provide matches the ones on the account you wish to pay.

Throughout our scams campaign, we’ve heard of lots of stories where victims of scams have lost huge sums of money where they have believed they are making genuine payments for things like conveyancing fees or building work, but instead they are using bogus bank details sent to them by scammers.

The Forum has outlined that customers wishing to make a bank transfer will have to now enter the exact name on the account, as well as the other details. This would mean that when you transfer funds to another account the system would also need to confirm the name of the account you are paying matches the name you’ve provided.

If the transfer is to a person, the confirmation system will check to verify if the details are a match or not. If the transfer is a business, the confirmation system will return with the name, address and registration number of the company so that the consumer can check it.

The hope is that this confirmation system will encourage customers to verify details before transferring any money and also help to tackle one aspect of bank transfer scams.

The system will be available from December 2018, although it will be voluntary as to whether your bank offers it to you when you make a payment

We’ve been calling for confirmation of payee for some time now, so while we welcome its introduction, we believe it’s important that banks quickly act to introduce this measure to help protect their customers from scams.

Our Money expert, Gareth Shaw, said:

‘Hundreds of millions of pounds are being lost to these increasingly complex scams, so introducing confirmation of payee is a vital step towards boosting consumer protection.

‘With consumers still at risk of losing-life changing sums of money, banks must now urgently adopt these proposals.’

Update: 18/10/2018

A new ‘confirmation of payee’ service is on its way in 2019 to combat bank transfer scams.

Customers are to be warned if the name of someone they’re trying to pay does not match the account details. With losses to this type of fraud increasing drastically, it’s clear that this measure can’t come soon enough.

While we await its introduction, it’s crucial that an agreement is reached on the funding mechanism to reimburse all victims of bank transfer fraud who have been left out of pocket through no fault of their own.

Update: 25/09/2018

According to UK finance, the trade body that represents the banking industry, fraud victims have lost more than £145m this year to scams that leave them with no legal way of getting their money back. Just 20% of losses have been recovered.

In the first six months of the year, there were around 34,000 cases of ‘authorised push payment fraud’ (bank transfer scams). Losses averaged around £4,260.

Details of a reimbursement scheme are due to be published this week. Gareth, Shaw, Head of Which? Money Online said:

“It’s now two years since our super-complaint highlighted the lack of protection for victims of bank transfer scams, but these shocking figures show just how widespread the problem still is.

Banks’ efforts to date have been woefully insufficient and they have not done enough to protect their customers, who continue to lose life-changing sums of money to ever-more sophisticated crooks.

The Payment Systems Regulator has rightly committed to introducing a reimbursement scheme for victims. It’s about time that banks step up and properly compensate customers who have lost money through no fault of their own.”

Update: 28/02/2018

Win! The regulator has confirmed plans and timeframe for scams reimbursement scheme. Following its consultation on a reimbursement scheme for victims of bank transfer scams, the Payments Systems Regulator (PSR) has today confirmed that it will press ahead with plans to better protect scams victims.

It has also announced the formation of a steering group to design the code that will underpin the reimbursement scheme, setting out the members as well as the key principles and objectives of the group for the next six months. Forming this steering group alongside Which? are Age UK, Toynbee Hall, and representatives from the banking and tech industries.

The group will deliver an interim set of rules by the end of September. These will then be consulted on with a final set agreed by the end of the year.

However, from September, the Financial Ombudsman Service (FOS) will be able to use the draft code when determining new consumer complaints about authorised push payment scams.

We welcome today’s announcement as a step in the right direction. We hope that this will help to ensure the reimbursement scheme properly compensates victims who have been left out of pocket through no fault of their own.

However, the industry must also use other measures to better protect consumers at the point of transfer to stop such scams happening in the first place. These measures could include confirmation of payee, which would add an additional check before a bank transfer is made.

Do you want your bank to sign up to Confirmation of Payee to help protect you from bank transfer scams? What should the banks to do to protect their customers from losing money to bank transfers? Do you think the next government should tackle scams and financial fraud?


This comment was removed at the request of the user

Which? has issued this press release today:
“Which? responds the APP Scams voluntary code publication
28 February 2019
Gareth Shaw, Head of Money, Which?, said:

“Two years since our super-complaint highlighted a lack of protection for bank customers, the publication of this code is a significant step – …………………………………………………….”

I can find no link in the press release to the code. Here it is:

I would like all Which?’s press releases that cover other people’s announcements to include a link so we can see exactly what was announced. It rarely (never?) seems to happen.

@abbysempleskipper, Abby, do you think the Press Office could do this in future?

Have Which? an explanation as to why Confirmation of Payee has been delayed? It is, presumably, not simple to implement one system across all banks but it would be useful for the industry to tell us about it. Have they been asked?

@malcolm-r Sorry, this one slipped through the gaps last week!

The press team have your suggestion and are discussing it in their team meeting this week. Those releases are really for journalists and it was thought that it wouldn’t be necessary have links but they will review the practice it might be helpful to everyone.

There is a consultation on Confirmation of Payee to ensure it is implemented effectively. As you say it isn’t straightforward but we will continue to put pressure to ensure it is implemented as soon as is practical.

I’m not convinced that implementation of Confirmation of Payee is difficult. Had it (or an alternative scheme) been mandatory before online payments were permitted, I suspect that problems would have been overcome quickly.

As Which? has told us repeatedly, consumers have lost a considerable amount of money thanks to the failure of the banks to act responsibly. Anything that Which? can do to push this forward would be welcome.

It would be useful to know why it might , or might not, be simple which is why I would like an explanation. Saves us guessing. I hope Which will pursue this.

@abbysempleskipper, thanks Abby.
I regularly look at Which?’s press releases on the website and new ones can be emailed as notifications to interested members.

It would be interesting to look to see how many members have signed up for those emails.

I have a folder of links to Which? pages including the press releases at the top of the page in my browser. It works as a drop-down list, much like the drop-downs at the top of this page.

It would be useful if, when Which? criticises the delay in introducing Confirmation of Payee, they investigate the background to any delay and inform us accordingly. If they asked the PSR they might well be given good reasons (or not) for the delay they, the PSR, are proposing. We should be told.

PSR – A regulator to oversee the payment systems industry …..
Following HM Treasury’s consultation Opening Up UK Payments in March 2013 the PSR was officially created under the Financial Services (Banking Reform) Act 2013.
The Payment Systems Regulator said 9th May 2019 about Confirmation of Payee:
At the end of 2018, the regulator opened its initial consultation seeking views on a proposal to give a general direction for all payment service providers to implement CoP. In the main, there was overall support for the proposal for a direction with useful feedback on its design and proposed deadlines.
Now, having reviewed the feedback and carefully considered the best approach, this latest consultation sets out a revised proposal alongside the legal text of the proposed direction.
The PSR proposes giving a specific direction to members of the six largest banking groups in the UK, who are involved in around 90% of bank transfers, to fully implement CoP by 31 March 2020.
The regulator expects the remaining payment service providers to bring in this important protection at the earliest opportunity, and will keep this under review.
“But it needs to be done in the right way if it is going to help protect people from APP scams and help stop payments being sent to the wrong account. This is why we have updated our plans and focussed our proposed direction so that more people start to benefit from this protection sooner.”

Which? Press Office
Follow Follow @WhichPress
“The banks must also ensure a long-term funding solution is in place by 1 Jan 2020, so there can never be a return to the days when people were losing life-changing sums of money through no fault of their own.”
@GarethRShaw @Telegraph

As far as the “funding” is concerned, like all compensation, remember who pays; it is the consumer, in this case the banks’ customers. No magic money tree provided by a third party.

The new rules must ensure that people do not relax their vigilance when transferring money.

The outcome should be banks being more careful about who opens accounts, how they are operated, and their procedures. This is likely to affect the ability of some customers to open and operate their accounts, whether legitimate or otherwise.

I do think that the ability of customers to operate their accounts may also be restricted, particularly those who are regarded as vulnerable. Transferring money instantly may be a casualty, and a limit could be imposed on the sums allowed to be transferred without their bank’s direct knowledge and consent. Protecting people from themselves may be introduced to protect the banks.

Jane says:
10 May 2019

“These banks will begin a new reimbursement scheme for customers who have lost money through bank transfer scams on 28 May this year.”
What does this mean? That the scheme will start reimursing scam victims who were defrauded on or after 28th May or could the reimbursement apply retrospectively i.e. to victims defrauded before 28th May? Thanks.

Hi Jane,

Sorry for the delay in replying! The details of the scheme are here. The guarantee does not cover retrospective losses, only those from 14 April onwards.


If your bank does not sign up transfer your account to a bank that has. Those banks who refuse will soon go out of business. Simple.

Banks must check the account number matches the name or be automatically held liable for the scam.
No one I know deals in account numbers when they make transfers they use names and not even most bank staff realise this is not checked against the name. Also the bank must show they have checked the account used for the transfer meets the laws on money laundering against crime and terrorism before the individual can be held liable for the scam.

Not directly related to online fraud, but still aiding fraud. Lots of bank cards go missing in the post. Why don’t banks stop mailing them and people collect them in person from their bank with id. If someone is unable to collect in person, then either inform the bank someone else will collect with id. It is obvious to anyone it is a bank card because you can feel it in the envelope. The thief then only has to wait for another letter containing a pin number which arrives a couple of days later.