New data from the Financial Ombudsman Service shows banks cannot be trusted to interpret the voluntary CRM code fairly or treat customers in the right way.
18/11/21: Win! Reimbursement to be made mandatory
11/11/21: FOS finds banks are failing to follow their own code
I, for one, do all my banking online. And when I say all my banking – I mean all of it. My bank statements are sent to my email, my bank card’s exist mostly as pictures on my smartphone that flash up with a tick as I make a contactless payment, and I use my banking app to send my friends and family money when settling the bill at a restaurant.
But, as I pay for things in bytes and bits; ones and zeroes, I worry what would happen if something were to go wrong. What if the person on the other end of the transaction is not my bank, barista or buddy – but I’ve fallen victim to a sophisticated fraudster?
I’d like to think my bank would reimburse me fairly easily. Which is why new data from the Financial Ombudsman Service (FOS) – the place where customers go when they’re unhappy with how they’ve been treated by their bank – is so worrying.
The numbers speak for themselves
The data shows that the number of authorised fraud complaints made to the FOS more than doubled in 2020-21. Complaints rose from 3,600 to 7,770 in that time frame.
The vast majority of complaints are related to the sort of scam I was talking about above. An Authorised Push Payment (APP) scams is when someone is tricked into sending money to an account that’s being operated by a fraudster when they may think it belongs to a friend, family member or legitimate business. Scammers’ techniques are getting harder and harder to recognise.
We spotted the threat to consumers from and the lack of protections for victims of APP scams years ago. And after our super-complaint to the regulator, the Payment Systems Regulator (PSR), five years ago, most major banks signed up to a voluntary code (Contingent Reimbursement Model code).
The code instructs banks to give customers their money back when they are not at fault and to provide them with adequate support.
Not following the code
Not only are the number of complaints to the FOS rising, but nearly three-quarters (73%) of complaints were upheld by the FOS in favour of the customer. Many complaints have been made about banks refusing to or delaying reimbursement. This means that the FOS have found the banks to be breaking their own code in nearly eight in ten cases.
Figures show that NatWest and The Royal Bank of Scotland (RBS) – part of the same banking group – are getting it wrong in nearly nine in 10 (86%) cases, with Santander (82%) and Bank of Scotland (81%) following closely behind.
It's clear banks can't be trusted to make the right decision when it comes to reimbursing those who've fallen victim to bank transfer scams.
This list highlights the banks found to be mistreating bank transfer scams the most often.
— Which? (@WhichUK) November 11, 2021
Why we need mandatory reimbursement
Having such a high percentage of decisions upheld in favour of victims shows that banks cannot be trusted to interpret the voluntary CRM code fairly or treat customers in the right way.
That is why Which? wants the government to swiftly make the necessary changes to enable the PSR to introduce mandatory APP fraud reimbursement obligations on all firms, with robust oversight and enforcement.
See how your bank ranked and the number of cases upheld by the FOS in favour of the fraud victim:
Have you been refused reimbursement by your bank after falling victim to an APP scam? Did you made a complaint to the Financial Ombudsman Service about your bank’s decision?
Was that complaint upheld by the Financial Ombudsman Service? Let us know by emailing firstname.lastname@example.org