Some of the UK’s largest banks are failing to provide adequate support to fraud victims, according to research from consumer rights group, Which?
Poor customer service and a lack of support for victims has left customers feeling abandoned and exposed to future scam attempts.
The research has prompted calls for banks to improve their response to customer fraud concerns, with the consumer rights group calling for greater regulatory protections for 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,” said Which? Money Editor, Jenny Ross.
“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,” she added.
Following a survey of more than 400 people who had been victims of fraud or attempted fraud, Which? found that 83% were satisfied with how their bank managed the incident.
Despite this, the consumer group said that still leaves a “significant number of victims” slipping through the cracks and receiving substandard treatment.
The Office of National Statistics estimates that there were 4.6 million fraud offences commitment during the year ending March 2021.
Among customers who reported fraud to their bank via phone or webchat, for example, one-in-seven said they waited 30 minutes or more to speak to a representative of the bank.
Some customers struggled to contact their bank at all after falling prey to criminals, including one HSBC customer who waited for seven hours on hold, accruing a £50 phone bill in the process.
“This is a concerning amount of time in what will often be an emergency – in extreme cases, this delay could cost thousands of pounds,” the consumer group said.
Information and Resources
Clear, concise information on how consumers can better protect themselves was a point of contention during the Which? study.
The consumer champion also found that one-third (32%) of victims of fraud – or attempted fraud – said their bank did not offer advice or resources in this regard.
Which? contacted a host of high street banks to enquire about the protocols they had in place for victims of fraud.
All of them said that they offer advice or guidance in some form or other. However, the study findings appear to contradict what consumers told researchers. Which? said this raises concerns over whether this information is reaching customers and how effective it is at stopping scams.
The research has been published amid growing concerns over ‘recovery fraud’ – a scam in which victims are scammed again by fraudsters pretending to help them recoup losses.
Over the last year, this type of fraud has increased by 39%, with victims losing more than £14,000 on average.
This particular type of scam is causing serious problems for consumers hoping to recoup stolen money. A customer’s entitlement to a refund depends on the type of fraud they have fallen victim to, Which? explained.
In the case of unauthorised fraud – where money is taken from your account without permission – a debit or credit card provider must refund the customer unless they can prove that they have been grossly negligent or acted fraudulently.
Conversely, if a customer were tricked into sending money to a scammer as part of an authorised push payment scam or bank transfer fraud, there are no legal protections against losses.
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Although most major banks have signed up to a voluntary reimbursement code on bank transfer scams, some firms signed up to the code have been criticised for how they are providing support to customers.
A recent report by the Lending Standards Board (LSB) found that some firms were failing to meet the requirements to provide a response on reimbursement claims within 15 days, or 35 days in ‘exceptional circumstances’.
Furthermore, the LSB report warned that in some cases there was “little evidence” of firms providing any updates to the customer about the delay and when they could expect a decision.
Which? has called for the voluntary code on bank transfer scams to be replaced with a mandatory reimbursement scheme.
These proposals would see the inclusion of stronger protections against bank transfer fraud for consumers, as well as tougher enforcement against firms that break the rules.
“In order to achieve this, the government should grant the Payments System Regulator the powers it needs to make changes through the Faster Payments system.” Which? said.