A new report from Which? has revealed that fewer than half (46%) of fraud victims who’ve unknowingly transferred money into scammers’ bank accounts are being reimbursed. The consumer watchdog is subsequently calling for strengthened standards to be put in place by banks to make the process fairer and more consistent.
These scams, which affect thousands of customers each year, occur when a fraudster tricks the customer into transferring their money into another account in the belief that it is legitimate – for example to pay off an outstanding bill or for security reasons.
In 2019, a voluntary code of conduct was introduced by high street banks. The code was designed to offer increased protection from scams, especially for vulnerable customers, by ensuring banks paid people back in the event of fraud.
But, more than two years on, this type of fraud is still affecting honest Britons and personal finance experts at money.co.uk are urging people to remain on the high alert against criminals.
James Andrews, senior personal finance editor at money.co.uk, said: “Changes aimed at getting more people their money back are always welcome, but it’s still essential people know how to spot a scam when they see one, and how to protect themselves against it.
“There’s a real danger that announcements about new fraud rules or protections put in place by banks will see people relax and assume they are safe. Sadly, criminals are smart and all too often adapt to new rules and protocols almost as fast as they are unveiled.
“Worse, money transfer scammers use the customer themselves as a way past banking security. If a criminal can convince you to log in legitimately then get you to transfer money to a ‘safe’ account, or even withdraw it as cash, there is no technological solution that can prevent it.
“The good news is that banks are doing more to help, from ‘confirmation of payee’ – which puts extra blockers up against people impersonating others when asking people to transfer money – to warnings flashing up on screen all the way through to training for staff in branches and on the phone to help customers stay safer.
“Criminals often try to apply psychological pressure to get people to push past these barriers – posing as officials and telling customers they have already been scammed, are being targeted or even the subject of a criminal investigation from the police or HMRC.
“To stay safe, it’s essential you put in your own barriers too. If you get a call or message from someone saying they are from your bank or the police, get them to tell you their name, then call back – ideally from a different phone line – using the number you have on your bank statement or from another official, offline source. If it’s real, you will quickly be put through to the right person.
“Do not trust numbers or click on links sent to you as part of the warning – even if they look like they’ve come from your bank – as criminals can fake links, websites and even the number they appear to be calling or texting from.
“Despite these precautions, it’s still possible that even the most security conscious person will fall prey to a financial scam. If this does happen, it’s essential that you know what steps to take to get your money back and prevent a similar scam from happening in future.
“The first step is to contact your bank directly using the methods outlined above as soon as you suspect you’ve been a victim of fraud. Even if you’re not 100% certain at the time, your bank can increase security on your account as an interim measure while you investigate.
“Several banks also have the ability to temporarily freeze your credit and debit cards without cancelling them, so if you are mistaken you don’t have to wait for new cards to be set up.
“If the scam is to do with online banking, you should be able to get a direct refund under the Payment Service Regulations (2009) and The Lending Code. If the scam is credit card related, you should be protected on transactions of up to £30,000 under Section 75 of the Consumer Credit Act – so whatever the scam, there’s always a way of getting your cash back.
