Banks are refusing to refund more than half of fraud victims by using a loophole and relying on generic, automated warnings, it has emerged.
So-called authorised push payment fraud, where consumers are duped into sending money to a criminal posing as a trusted figure, is one the fastest-growing crimes in the country. Some £101m was stolen from more than 50,000 victims between May and December last year.
A code of practice, introduced in May三级成人视频, was supposed to protect blameless victims and ensure they get their money back. However, the minutes of a conference call between regulators and City bosses revealed banks were sending customers generic fraud warnings and then using them as caveats to refuse refunds.
Fewer than half of victims三级成人视频 were being reimbursed and two banks only refunded 4pc of customers.
三级成人视频Chris Hemsley, of the Payment Systems Regulator (PSR), said this was far less than expected given the code worked on presuming customers would be reimbursed unless there are "clear grounds for holding them liable".
He said emerging evidence from the Financial Ombudsman Service suggested some banks were falling back on generic warnings 三级成人视频or were expecting customers to have a greater knowledge of scams than was reasonable.
三级成人视频The warnings, which appear if a customer makes a potentially suspicious payment, are supposed to be specific, include more detail to help customers spot fraud and be targeted.
Consumer group Which? said banks must prove their warnings were fit for purpose and actually helped reduce fraud rather than use them as a means to deny refunds.
Speaking on the call Mr Hemsley said: “These issues need to be addressed as soon as possible to make sure the code is delivering the right outcomes for consumers. Looking across all the evidence, there is some cause for concern that outcomes are not where we all want them to be.”
三级成人视频On the level of refunds being handed out, he said: “If this data is a reasonable indication of what customers are experiencing, this is well below the levels of reimbursement I was expecting.
“After all, the code presumes that customers should be reimbursed unless there are clear grounds for holding them liable."
三级成人视频Gareth Shaw, from Which?, said banks should be forced to publish figures on what proportion of fraud victims they reimbursed and that, if the voluntary code is failing, the Government should step in.
He added: “Banks that reimburse just four per cent of cases are making a mockery of the scams code, which clearly pledges to reimburse all blameless victims of bank transfer fraud.”
Before the code was introduced roughly 19 per cent of victims were refunded. Most of the major banks have signed up to the code, but some have gone further. TSB has guaranteed its customers refunds in almost all circumstances.
三级成人视频A spokesman for UK Finance, the banking trade body, said banks are committed to defending customers from fraud, but that regulators needed to consider how data breaches in other industries are facilitating fraud to come up with a solution.