71% rise in bank transfer fraud this year

Over £350 million has been stolen in fraudulent payments in just six months...

September 22, 2021
71% rise in bank transfer fraud this year
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A new report from trade association UK Finance shows that bank transfer fraud losses have risen by a massive 71% in the first half of 2021.

However, despite banks signing up to a voluntary code to try to encourage payments to be returned, it’s been found that less than half of the money that has been lost has been paid back to victims of these scams.

Millions lost to scammers

The new data shows that around £355 million was stolen from customers in fraudulent payments between January and June 2021, a rise of 71% compared to the same period in 2020.

Of that amount, £296.1 million was due to losses made by customers of personal accounts, while almost £60 million was fraudulent payments taken from business banking accounts.

Only 42% of payments – around £150 million – was returned to customers when they complained about the fraud.

A voluntary code has been established to make sure that victims of bank scams who are blameless are given back the money that they have lost. However, not every bank has signed up to the code, and there are concerns that those banks which have signed up aren’t following it consistently or fairly.

The issue comes down to blame – the guidelines aren’t hard and fast and rely on a customer demonstrating that they are not at fault. Many banks argue that customers should be aware of some of the tricks used by scammers and that it is their own fault for falling for them or for giving out details that they may have previously been told to keep to themselves.

This shameful situation raises serious questions about the payment regulator’s response and the behaviour of banks that all too often wrongly try to pin the blame on their customers.

The regulator must introduce mandatory and more robust reimbursement requirements for all payment providers, to ensure that customers are treated fairly and consistently when they fall victim to a bank transfer scam.

– Jenny Ross, Which?

National security now at risk?

UK Finance has said that the scale of fraudulent payments in the UK is so big that it is now becoming a national security threat, and as such, banks will need support from the government. It has said that it is vital that economic crimes are brought into the scope of the Online Safety Bill to help protect customers and prevent fraud.

Not only is there the risk of money funding criminal activity, but many of the scams also involve impersonating trusted groups such as the post office or even the police. As the line blurs between real communications and scams, people will be less likely to trust genuine communications.

UK Finance has said that people should follow the advice of the Take Five to Stop Fraud campaign, which encourages people to stop and question every transaction they are asked to make. Genuine bodies that need money will never rush a customer while scammers will apply time pressure to make people panic. If anyone thinks they’ve fallen for a scam they should contact their bank immediately and report it to Action Fraud.

Andrew Cook
Andrew Cook
Hi, I'm Andrew and I am a news writer for CompareBanks. My main focus is on digital and online banks and looking at the banking landscape is changing within the UK and around the world.

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