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Banks are failing to help fraud victims, says Which?

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03/08/2021
Some banks are failing to support fraud victims and possibly even exposing them to future scam attempts, according to Which?

A study by the consumer group found one in seven (15 per cent) people who had reported fraud to their bank had to wait 30 minutes or more to speak to someone.

One HSBC customer had to wait a total of seven hours on hold, racking up a £50 phone bill.

Eight in 10 victims of fraud or attempted fraud in the last 12 months said they were satisfied overall with how their bank managed the incident.

But Which? said that still leaves a significant number of victims potentially slipping through the cracks and getting substandard treatment, considering the Office for National Statistics estimates that for the year ending March 2021 there were 4.6 million fraud offences.

A third (32 per cent) of victims said their bank did not offer advice or resources to help them better protect themselves in the future.

The figures come amid growing concerns over ‘recovery fraud’ – where victims are scammed again by fraudsters pretending to help them recoup their losses. This type of fraud has seen a 39 per cent increase since last year, with victims losing a shocking £14,408 on average.

Victims may or may not get their money back depending on the type of fraud. In the case of unauthorised fraud – where money is taken from your account without permission (for example, your card is stolen and used to make online purchases) – your debit or credit card provider must refund you unless they can prove that you’ve been grossly negligent or acted fraudulently.

But if you were tricked into sending money to a scammer – known as authorised push payment (APP) fraud or bank transfer fraud – there is no such legal protection against losses.

Most major banks have signed up to a voluntary reimbursement code on bank transfer scams which not only instructs them to reimburse customers who are not at fault, but also to provide them with adequate support.

However, firms signed up to the code have been criticised for how they support to customers.

A recent report by the Lending Standards Board (LSB) found that some firms were failing to meet the requirements of providing a response on reimbursement claims within 15 days, or 35 days in ‘exceptional circumstances’.

Which? is calling for the voluntary code on bank transfer scams to be replaced with a mandatory reimbursement scheme.

Jenny Ross, money editor at Which?, said: “Fraud can have a devastating impact on victims. When banks fail to offer proper support, it can make a nightmare situation even worse, and an absence of information from firms about how people can protect themselves could even lead to ruthless scammers striking for a second time.

“The lack of help provided to some victims of bank transfer scams is particularly concerning, and protections for this type of fraud have to be strengthened.

“The payments regulator must introduce a mandatory reimbursement scheme for all payment providers, to ensure that customers are treated fairly and consistently when applying to get their money back.”

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