Tuesday 16 May 2017

Big Banks Being Accused Of Failing To Protect Customers From Transfer Scams

banks

Which? said it was writing to lenders for an explanation, six months after the payments regulator stopped short of its demand that banks be made liable for authorised push payment losses that often involved "life-changing" amounts of money.

The consumer group had launched a so-called super-complaint last year that pointed out that, unlike other payment methods, victims conned into sending money by transfer to a fraudster have no legal right to get their money back from their bank.

The Payment Systems Regulator responded by urging banks to work together to crack down on the scammers but ruled there was insufficient evidence to change the liability rule.

Which? argued it was clear people were still losing money as it was being contacted by victims.

It described how one was offered compensation of 10p by their bank after criminals cleared their account of £17,500.

A survey it commissioned earlier this month suggested 8% of people had made a bank transfer, or knew someone that had made a payment, that later turned out to be to a fraudster.

It said just over half of those people had fallen victim in the last six months.

Which? money expert Gareth Shaw said: "Despite the fact that consumers are still losing life-changing sums of money to fraudsters, it's not clear what meaningful action the banks have taken to protect their customers.

"People assume that banks will look after them and their money. So it's vital that the industry, regulator and next Government act quickly and decisively to tackle financial fraud."

Industry group Financial Fraud Action UK responded: "Protecting customers from fraud is a top priority for every bank.

"Financial Fraud Action UK has agreed a clear action plan with the regulator on push payment fraud and the industry is working hard to deliver this to the agreed timetable."

Its statement added: "At the same time, we are working with law enforcement and government, through the Joint Fraud Taskforce, to tackle fraudsters.

"Across the industry, and with partners, we are developing new processes to help police intervene when potential victims visit a bank branch, and we are exploring new ways to track stolen funds moved between multiple bank accounts."

A spokesman for the Payment Systems Regulator said it was currently gathering evidence on the industry's efforts to crack down on such fraud.

He added: "We committed to seeing the industry work together to take a pro-active stance on protecting consumers from fraud.

"We said we would report back publicly in the second half of the year and we remain on track to do so."


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