Victims of bank transfer scams face a “total lottery” over whether they will get their money back under a voluntary industry code, according to a consumer campaign group.
Which? said people who fell foul of authorised push payment (APP) fraud are being treated unfairly or inconsistently by banks and building societies when trying to get refunds, leaving some thousands of pounds out of pocket.
The criticism comes amid concerns that criminals have used the coronavirus pandemic as an opportunity to scam people into handing over money.
The banking industry says regulators should look at how other sectors, such as telecoms, are facilitating this type of crime
APP fraud happens when someone is tricked into transferring money directly to a fraudster.
A voluntary reimbursement code was introduced last year to make it easier for fraud victims to get their money back in situations where neither they, nor their bank is to blame.
However, Which? argues there are problems with the working of the code and also want it to be made mandatory.
The group pointed to the “woefully low” figure for reimbursement under the scheme, which currently stands at just 41%, as evidence of its failure.
It claimed that some banks’ narrow interpretation of the guidelines means they are often blaming customers for missing warnings or not doing enough to realise that they were being scammed, as reasons to refuse a refund.
This is despite the complex nature of many frauds, where criminals pose as legitimate bodies such as banks, businesses, government organisations and the police, and manipulate and pressurise people into transferring cash.
Which? said firms should be more realistic when considering whether customers could have done more to check people’s identity, particularly when criminals “spoof” or change phone numbers to pretend they are calling from a bank or credit card company.
Gareth Shaw, head of money at Which?, said: “The lack of fairness, consistency or transparency across the industry means that the chances of people getting their money back is often a total lottery.
“A voluntary approach to tackling bank transfer fraud has failed.
“Banks, regulators and government must work together to make the code mandatory and ensure that strong standards on reimbursement are introduced.”
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Katy Worobec, managing director of economic crime at UK Finance, which represents the banking industry, said: “We agree that a voluntary agreement alone is not enough, and new legislation is required to address issues of liability and reimbursement.
“With criminal gangs continuing to target customers, the government and regulators should consider as a priority how data breaches and vulnerabilities in other sectors such as telecoms and social media are facilitating these crimes, as part of an overall strategy to protect consumers from harm.
“Importantly, the banking and payments industry continues to take action on all fronts to stop these crimes from occurring in the first place, working with law enforcement and the government to protect customers and prevent stolen money from going to criminals.”