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Which? calls for protection to victims of bank transfer scams

Earlier this month, the Financial Fraud Action (FFA) unveiled their new campaign which was devised to help consumers protect themselves from being victims of fraud. Less than a week after the campaign – featuring five tips – was launched, consumer group Which? has called for more protection to victims of bank transfer scams.

According to Which?, people who are tricked into transferring money to fraudsters deserve better protection. They have challenged regulators as they say that anyone falling victim to these scams have no legal right to get their money back from their bank.

As part of their call for protection, Which? wants banks to offers their customers the same protection that victims of credit card fraud receive. Credit cards feature a number of different protections to their customers including free identity theft cover which protects you if someone steals your identity and runs up credit card bills in your name.

While purchase protection on credit cards means that when you buy something and it is stolen or lost within a set period, your credit card provider will give you your money back. Which? has pointed out that although banks have these security checks in place for reimbursement, they only apply to credit card holders and they want similar protection to apply to victims of bank transfer scams.

Director of policy and campaigns at Which?, Alex Niell, spoke to the BBC about this issue; “Unfortunately, as payment systems have developed, consumer protection hasn’t kept up… With bank transfers at the moment, consumers have no protection whatsoever, and we don’t think that’s right.”

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Which? has used its legal power to make a super-complaint to the Payment System Regulator which alerts the Financial Conduct Authority (FCA). Their complaints states that it would like the regulators to:

  • Formally investigate the scale of bank transfer fraud and how much it is costing consumers.
  • Take action and propose new measures as well as creating greater liability for banks to ensure consumer are better protected when they have been tricked into make a bank transfer.

The regulators have 90 days to investigate and respond to this super-complaint.

However, the banks’ anti-fraud group has said that this kind of blanket approach would simply not work. The FFA themselves have said that it is correct for banks to pay compensation on a case-by-case basis as otherwise, there is a chance that people would not be as careful and vigilant as they should be.

Through their research, which led to the super-complaint, Which? found that six in 10 people had no idea that they had no consumer protection if they are scammed via bank transfer.

Alex Neill believes that banks must do more to tackle this sort of fraud and safeguard their customers from scams; “Where is the risk best placed? Is it with the consumer as it is at the moment, or should it be with the banks?… We think it should be with the banks as they have the systems in place to actually check these sorts of things.”

This super-complaint, along with the Take Five campaign launched mere days before, points to a current fight for change in the industry. Many feel that it is a much needed to change to protect consumers but education is just as important to protect yourself and your money. You can find out more about the Take Five campaign and its tips on our sister website.

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