Bank Transfer Scam Compensation

In 2016, Which? Consumer Magazine launched a Super Complaint to the Payment Systems Regulator. Which? is one of only a few organisations empowered by government to raise super complaints on behalf of the general public.

The super-complaint said:- “We think banks need to do more to protect customers who are tricked into transferring money to a fraudster.”

Which? thinks banks should shoulder more responsibility for money lost to bank transfer scams. Customers who lose money due to scams via direct debit or credit and debit cards are reimbursed, for example, but not bank transfers. This would give banks an incentive to develop better mechanisms to prevent the fraud in the first place.

Which? Say “You only have to read the harrowing real life stories in our super-complaint to realise that these scams are often so sophisticated that it’s impossible for people to be savvy enough to completely protect themselves. And the people being scammed are not only the stereotypical vulnerable groups; they are often financially and technologically literate.”

Which? did some research by asking more than 1,000 members of the public if they could spot the difference between real and spoof emails and found that 50% of people were fooled by these sophisticated scam emails.

At last check, 359,823 people had signed the petition about this matter.

The Payment Systems Regulator has announced it is consulting on plans to reimburse victims of bank transfer scams. From the 1 January 2018, people who’ve been victims of a bank transfer scam will only need to deal with their bank when making a complaint – not the bank the fraudster was with. This means that banks will provide access to a dedicated team of staff trained to deal with scams.

However, the Regulator is also consulting on a reimbursement scheme for people who are tricked into transferring money to a fraudster when their bank failed to do enough to protect them. This is very good news.

The Regulator’s actions in response to the super-complaint will go a long way to tackling these scams. However, if banks are going to solve this problem and really protect their customers, they must also look at what other steps they can take to stop these scams from happening in the first place.

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