/ 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?


The Banks should be implementing safeguards for their customers all the time. It should be automatic.

I think this is a good idea, however the government is fudging the issue as always. Why is it not compulsory qnd why not implemented in weeks rather than months. How much money will be lost during the delay.

Jeremy says:
19 December 2017

You describe the scammers bank account as “Bogus”. It is not bogus. It is a valid bank account, opened by the bank for a customer whose credentials the bank has checked (haha) who just happens to be a crook. Confirmation of Payee will only work if the payee name is double checked by the bank on account opening (with reference to Passport office, HMRC, Companies House, etc) not just a scan of a possibly fake passport and a very-easy-to-fake utility bill. This name should then be un-editable by the account holder.

Banks have had a responsibility for ensuring Payee details on cheques match the account details when being presented for paying-in. So what is the reason for not verifying payee details when the money is paid by transfer.

I suspect it is laziness and costs the banks money. But when many bank branches are closing, customers find themselves forced into online banking and making payments by transfer. So, surely the money saved by the banks in closing branches should be invested in providing better security and protection for these types of transfer. The attitudes of banks towards their customers is I think shameful; they seem more interested in profits for their shareholders not providing a service for their customers.

Eamon says:
19 December 2017

This should have been implemented a long time ago & not just thought about…..

John Gundry says:
19 December 2017

Agree with the Which? campaign. Banks need to be proactive in denying fraudulent diversion of funds.

Louis says:
19 December 2017

I occasionally transfer funds and though I check the details a few times I’m always worried I may have made a mistake. This change (which should be compulsory) will certainly ease my worries when transferring funds.

If this is put into place its better for both the bank and the payee……..what’s not to like.

penny Pope says:
19 December 2017

I thought banks did check the names of accounts money is being transferred to as this information is required when making the payment. I was shocked to find out that the name of the account was not checked. I think the banks have been very negligent and account name checking should have been implemented as soon as the online transfer system was introduced. The banks have let customers down through their own incompetence and they should be liable for monies lost in this way.

Alan Gill says:
19 December 2017

in my view this is long overdue and obviously a sensible move for both the customer and the bank,it’s not rocket science just do it.

Kevin Radford says:
19 December 2017

This is a no brainer! I was under the impression that banks were unable to identify payees – hence the enormous number of people never getting their money back.
I would go further, much further. Every payment should be verified by the payer whether or not the payee is an individual or a company.
If the payer is not satisfied with the identity of the payee returned by the bank., there should be an option to report the suspected fraud and have the account immediately frozen until the discrepancy has been resolved. Thus the criminals concerned would not be able to disappear with the cash from other scams. No doubt this would be very costly to the banks but they can afford it and will be bailed out by us taxpayers if in real financial difficulty, as has happened in the past!

Thomas Elsmore says:
19 December 2017

The principal risk is clearly the scams we have all heard of . The proposed measure look to be a simple way to reduce the risks. Surely the banks should embrace this. Moreover the one thing that deters me from using bank transfers to make normal day to day payments is the risk that there will be a mistake in receiving or entering the payee’s details.

Robin says:
19 December 2017

It’s high time the banks took more responsibility and this is a step in the right direction.

Nationwide have this comment on the contribution bitcoin technology – Blockchain – can make to more secure banking. Doesn’t mean much to me but others might understand it and maybe comment?

Tom Farrell says:
19 December 2017

Any move which stops the scammers has to be Good

Robert Bauer says:
19 December 2017

This is not rocket science… The banks should also be much more robust in vetting people attempting to open new accounts!

Surely it is in the banks’ interest to make it easier to check that money is being sent to the correct account. No-one wants to waste time chasing money that has gone astray through a slip of the finger.

Norman says:
19 December 2017

This would be good for customers and should have happened years ago with ALL banks. Safeguards should be in place automatically to ensure this type of scam cannot occur. Scammers, however, are not idiots. They will simply develop a further scam to circumvent this one and so we’ll be back to ‘square one’!!

Joe Norman says:
19 December 2017

Looks useful, but I can see transfers failing because of a small error in the name I enter for the receiving account. There needs to be some leeway built in.
Better still if the bank automatically retrieves the account name from the other bank so I can compare it with what I expect before going ahead with the transfer.

Peter DB says:
19 December 2017

Might it not be better if the banking system came back to tell you to whom you are paying the money rather than you having to get it right?

Peter, this was examined and the consensus seemed to be that revealing the name of an account holder if you entered the wrong account details could breach the data protection act and also lead to fraudulent use of such information. Some details are in the Payments strategy forum “Consultation Assessment
Report December 2017”

Whenever I have to make a payment to a new account for a significant sum e.g. more than £1000 then I always send £1 first and ask them to confirm arrival before I send the rest. This would save having to do this, and should be easy for banks to implement in this connected age.