07Jun

Consumer organisation Which? has criticised the UK’s banks for not doing more to combat bank fraud, as it published a survey revealing the extent of the problem.

Which? made a super complaint to the Payment Systems Regulator (PSR) in September last year demanding that banks be required to do more to help victims of so-called ‘push payment’ fraud, where people are tricked into instructing their bank to send money to an account that is in fact controlled by a fraudster.

There are two main types of push payment fraud. ‘Malicious misdirection’ is where the customer believes that they are paying a legitimate, known party but have in fact been conned into paying to a scammer’s account instead. ‘Malicious payee’ scams involve customers making payments for promised goods or services to a previously unknown third party, but at the same time being tricked into making the payment to a fraudster.

The PSR responded to the super-complaint in December 2016, saying it believed that the issue was “a growing problem that needs to be tackled”. It added that “the way in which banks work together in responding to reports of scams needs to improve”, and that “some banks could do more to identify potentially fraudulent incoming payments and prevent accounts coming under the influence of scammers.”

The PSR said it would take three principal steps:

• Collecting and publishing statistics on the scale of the problem
• Working with banks to develop a common approach to the issue
• Examining what information can be shared by banks under existing law

The Regulator also promised to review industry progress on this issue in the second half of 2017.

Which? has now revealed the results of a survey showing that 8% of people have either been victims of this type of fraud, or else know someone who has been targeted. Of the reported cases of fraud, 54% occurred in the last six months, suggesting once again that this is a growing problem.

47% of those affected lost £10,00 or more, with 6% of victims losing more than £10,000.

37% of victims did not receive any money back at all – banks often take the view that if a customer authorises a transfer of funds, then their wishes must be acted upon.

Gareth Shaw, money expert at Which?, said:

“Despite the fact that consumers are still losing life-changing sums of money to fraudsters, it’s not clear what meaningful action the banks have taken to protect their customers.

“People assume that banks will look after them and their money. So, it’s vital that the industry, regulator and next government act quickly and decisively to tackle financial fraud. Failure to do so will continue to leave consumers paying the price.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.