Over £700,000 is being stolen from customer bank accounts in the UK every day on average, according to research conducted by Which?
The consumer body, which often looks at customer rights and safety, is arguing that the banking industry is also acting in an “unfair and inconsistent” way when it comes to reimbursing customers, as less than half of the stolen amount is returned.
Soaring Fraud Hits Customers Hard
Fraudulent crime is on the rise in the UK, with many customers falling victim to authorised push payment scams. These are where the customer is sent an email or SMS message where they are then tricked into sending money to a bank account owned by a scammer, who is posing as either the bank or as another customer.
While cases vary, some customers have lost many thousands to these scams. UK Finance, the banking body, says that around £412 million has been stolen in scam cases between May 2019 and the end of 2020. When averaged out over this time period, this means that the daily average is £707,000. It means £29,000 per hour, or £491 per minute, is taken from customers.
These thefts occurred over 189,000 cases in the same time period, which puts the average amount stolen (from individuals and businesses) at almost £2,180.
Repayment Systems Failing
However the main focus of the Which? study was on the amount that customers were reimbursed from these thefts. The figures state that only 46% of this amount had been returned, which means that customers have lost £225 million without getting it back.
Most high street banks have signed up to a voluntary industry code in May 2019, the date that this study tracks from. The code made it clear that banks were to reimburse customers who lost money through an APP scam, unless they either ignored their bank’s warnings about the payments or they acted in a way that was grossly negligent.
The Financial Ombudsman Service has said that banks are incorrectly deciding not to return these losses. Which? is pushing for mandatory measures to protect customers and give them fairer treatment, especially for those who have lost “life-changing” amounts of money to these scams.
Fraud has a devastating emotional impact on victims and the money stolen goes on to fund serious organised crime, so the banking industry’s primary focus is on stopping these scams happening in the first place.
A total of £182m has been reimbursed to thousands of customers since the APP voluntary code was introduced in May 2019. However, we agree that more needs to be done and is why we are calling for new legislation and regulation to help protect people from APP fraud and ensure consumer protections apply consistently across the banking industry.