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28th May 2019
New industry code to tackle fraud must deliver, says Which?
Banks cannot delay tackling transfer fraud a single day longer, ‘Which?’ is warning, as new research shows a staggering £674 a minute is lost to this devastating crime. The consumer champion is calling for all banks to urgently reassure their customers that they will be better protected against fraudsters by signing up to the new voluntary industry code.
While the code represents a significant step forward in the fight against bank transfer scams, ‘Which?’ believes further critical steps are required to halt this worsening crime. Three years on from its super-complaint, losses to bank transfer fraud are spiralling out of control, with £354m lost in the last year alone – most of it stolen from personal accounts.
This figure means that every month, £29.5m is lost to bank transfer fraud; that equates to £970,685 per day, £40,445 per hour, £674 per minute and £11 per second. Bank transfer scams can cost people their entire savings, with average losses to personal accounts of £2,920 – and ‘Which?’ regularly hears from victims whose lives have been thrown into chaos by the loss of much smaller sums.
Ahead of its launch, ‘Which?’ wrote to UK Finance demanding that the industry meets five tests that will determine the Code’s success. These are critical in ensuring progress towards the overall goal of finally halting bank transfer scams.
Which?’s five key tests:
1. Banks must promise to protect their customers by signing up to the Code with the regulator pledging to conduct a one-year review on its effectiveness.
2. The regulator must ensure all banks introduce vital name-check security (confirmation of payee) no later than its new deadline of March 2020. The latest delay will cost people an additional £109m in losses while they wait for this important measure.
3. No blameless scam victim should ever be denied reimbursement again, and full refunds should be issued swiftly.
4. Banks must show they are serious about protecting consumers by immediately agreeing a long-term funding solution for no blame refunds.
5. Banks must publish victim and reimbursement figures on a regular basis to allow effective monitoring in the fight against transfer fraud.
Gareth Shaw, Head of Money, Which?, said: “For too long, victims of bank transfer fraud have lost life-changing sums and subsequently faced a gruelling battle to get their money back.
“By adopting this code, banks must offer much greater protection to consumers, while quickly and fairly reimbursing those who are unfortunate enough to fall victim.
“Failure to do so will require swift intervention from the regulator, as these devastating scams can’t be allowed to derail lives any longer.”