If you’ve been tricked into sending money to a criminal, you now stand a much better chance of getting your money back. But Which? Money has found that the way banks treat victims continues to be a lottery, despite the introduction of new industry standards. The voluntary Contingent Reimbursement Model code, in place since May 2019, marked a breakthrough in protection for victims of bank transfer or authorised push payment (APP) fraud. It compels banks to reimburse blameless victims, as they do for fraud that’s related to card payments and direct debits. Yet early signs suggest that banks are shifting responsibility onto customers, by refusing to cover losses on the basis that they show fraud warnings at the point of payment.
How does bank transfer fraud happen?
In the first half of 2019, losses to APP fraud reached £146m. These scams often start with a text, email or phone call from a fraudster purporting to be someone you know personally or a legitimate company. A common method is to pose as your bank and tell you your account has been compromised, instructing you to transfer your cash to a ‘safe account’ while the problem is resolved. But the account you move your money to will have been set up by the fraudster.
How the new fraud code protects you
If your bank is signed up to the code (check the table below) it must take steps to protect you from APP fraud. These include providing ‘effective warnings’ where it identifies a risk. As a customer, you also have responsibilities – you shouldn’t ignore these warnings and must have a reasonable basis for believing that you’re paying the right person. If both parties have met the standards set out in the code, there is a ‘no-blame fund’ that banks can use to reimburse innocent victims.
Although TSB is not a signatory of the code, it promises to reimburse all victims of fraud under its ‘Fraud Refund Guarantee’, launched on 14 April 2019.
The problem of victim blaming Which?
Money has heard from people who were told they won’t get their stolen savings back purely because they ‘ignored fraud warnings’ – even where it seems unfair to expect them to have behaved differently. Some said their bank seemed ‘uninterested’ in the specific details or nature of the scam, even though this could inform their assessment. Michelle, 38, lost almost £33,000 after responding to a text message about a ‘suspicious payment to Airbnb’ in August 2019. It appeared to come from Lloyds Bank’s usual phone number, sandwiched between two genuine messages (see image, below), so she called the number supplied, unaware that scammers can manipulate the information shown on your phone to mimic the number of a real company, such as a bank (known as number spoofing)……Read more>>