Bank transfer scam victims face a “lottery” over whether they will be reimbursed – and without more transparency from banks people will continue to be treated unfairly and inconsistently, according to Which?
Many firms are not prepared to voluntarily publish their reimbursement data, according to the consumer group, which said they should be forced to.
Which? said it had contacted major banks and building societies, urging them to commit to publishing their reimbursement rates by May 28.
Two years earlier, a voluntary code for banks was introduced, committing them to reimburse customers who had been tricked into transferring money to a fraudster, in situations where neither they nor their bank was to blame.
These types of scams are called authorised push payment (APP) fraud.
Before the code was launched, scam victims faced losing large sums of cash with no possibility of a refund as they had authorised the payment.
However, there has been evidence to suggest banks are applying the code inconsistently and, in some cases, expecting customers to have sophisticated knowledge about scams or relying on generic scam warnings they have sent to customers as a reason to refuse refunds.
Gareth Shaw, head of money at Which?, said: “Without greater transparency, inconsistent and unfair treatment of scam victims will continue, and the chances of having their losses returned will remain a lottery.”
Which? said Barclays was the only firm contacted that said it was ready to publish figures “periodically”.
TSB has already set itself apart from other banks with its own fraud refund guarantee. The bank, which is not part of the industry code, has said it reimbursed 99.6% of fraud cases in 2020.
Ashley Hart, head of fraud at TSB, said: “We firmly believe that customers deserve to know how their bank performs on the important issue of fraud refunds, especially at a time of such contrasting practices across the industry – and we echo Which?’s calls for transparency.
“TSB’s fraud refund guarantee means our customers are more willing to have open and honest conversations about fraud when they realise they will not be blamed for being a victim to crime.
“This greatly helps our fraud prevention and pursuit measures – as we advise the public on emerging scams and share detailed information with police forces to go after the criminals behind these attacks.”
Barclays reimbursed 74% of claimants in the first two months of 2021.
Barclays said: “We are ready to share our own insights, including on reimbursement rates, periodically”, but it said regulatory intervention is essential to ensure the approach is consistent.
Which? is urging the Payment Systems Regulator (PSR) to push through its proposals to require firms to publish the data.
Currently, information about the levels of reimbursement individual banks provide to customers under the scams code is published anonymously – with reimbursement rates across firms last year ranging from from 18% to 64%, according to the PSR.
Banks that are not part of the voluntary code face even less scrutiny, Which? said.
A spokeswoman for UK Finance, which represents banks and other financial firms, said: “Fraud has a devastating emotional impact on victims and the money stolen can fund serious organised crime.
“The banking industry works hard to protect customers from fraud as well as providing significant levels of reimbursement and the primary focus is always on stopping these scams happening in the first place.
“We believe publishing reimbursement data in isolation would give a very incomplete picture as it wouldn’t take into account the external drivers of fraud.
“Other industries also have a key role to play in tackling fraud, and therefore any data published should include statistics on the proportion and value of authorised push payment (APP) cases originating from places such as social media and other online platforms.”
UK Finance said £147 million of losses were reimbursed to victims under the code in 2020, equivalent to 47% of losses. This was up from 41% in 2019, and more than double the 19% of APP losses reimbursed before the code was introduced.
Which? said it does not believe that any of the points raised by banks prevent them from being more transparent.
The PSR said it has been considering requiring banks to publish their APP scam data, including reimbursement levels.
It said in a statement: “We are currently reviewing the responses to our call for views and the responses will inform our next steps, including whether regulatory intervention is required.
“Our plan is to consult on the next steps in the next few months.”