Which banks reimburse the most to fraud victims?

There are “staggering differences” between some of the biggest names on the high street.

November 8, 2023
Which banks reimburse the most to fraud victims?
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Connor Sephton

Written By

Connor Sephton

 

Once upon a time, comparing bank accounts merely involved seeing which one paid the highest interest rate on savings.

But with £2,300 a minute stolen by criminals in 2022 — and cases continually on the rise — there's now a bigger priority: finding a bank that reimburses fraud victims.

Research from Which? suggests there are “staggering differences” between some of the biggest names on the high street.

While TSB customers got 91% of their losses refunded, just 22% of Monzo users could say the same.

Nationwide, HSBC and Santander ranked highly in compensating consumers for their losses — but Starling, Virgin Money and Metro Bank did not.

Addressing the Issue

Authorised push payment fraud (known as APP scams for short) are one of the biggest threats facing current account owners today.

They often involve fraudsters impersonating financial institutions, and pressuring unsuspecting users into transferring funds out of their bank. 

Work is underway to tackle the inconsistency between banks. From next year, new rules mean they will be forced to return cash to victims — and right now, regulators are determining what the maximum amount of reimbursement should be.

Taking Action and Being Aware

This is a step in the right direction. It incentivises banks to stop their customers losing money in the first place. Financial institutions that receive stolen funds will also be on the hook for costs.

But consumers themselves also need to take action, and be aware of the risks. Banks will still have the ability to refuse refunds if they can prove there was gross negligence. 

This means that — if you fail to quickly get in touch with your bank after falling victim to a scam — you may not get your money back. Regulators have set a limit of 13 months for making a claim.

Many banks also display prominent warnings when you're filling out a form to start paying a new contact. Disregarding those alerts could undermine your case.

Cooperation and Warnings

And when an investigation into a scam begins, it's crucial that you fully cooperate with your bank and respond to “reasonable and proportionate” queries.

There are still hurdles to overcome. The Payment Systems Regulator has suggested that victims of APP fraud may have to pay an excess of up to £250 before being reimbursed the rest.

This is designed to make consumers think twice before hastily making a transfer. Which? has called for any excess to be scrapped altogether. It points to data that shows 32% of cases are below the value of £100, and fears such a policy could disproportionately affect low-income groups.

When shopping around for a new account, examine whether your chosen bank has a strong track record for reimbursing fraud victims. You should also delve into whether its customer service team is easy to reach by phone.

Long queues to speak to a human being can prove calamitous when you're being bombarded by texts from scammers — urging you to move funds because your security is at risk.

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Mentioned Banks

About Metro Bank Metro Bank is a retail bank based in the United Kingdom. Founded in 2010 by Vernon Hill and Anthony Thomson, it is the first new high street bank to open in the...
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About Santander Santander UK is a British bank. Though it is a British company and autonomously managed, it is entirely owned by the Spanish Santander Group. Santander is one...
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About TSB TSB is a UK-based retail and commercial bank. It is a subsidiary of the Sabadell Group. The TSB we know today came to be in 2013, formed from Lloyds TSB Scotland PLC...
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About Virgin Money Virgin Money is a bank and financial services company based in the UK. Originally launched as Virgin Direct Personal Financial Services in 1995, its second incarnation...
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About Nationwide Nationwide is a British building society and mutual financial institution. Headquartered in Swindon, it has additional offices in Glasgow, Bournemouth, Northampton...
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About HSBC Bank HSBC is a British banking and financial services company. It is the largest bank in Europe and the seventh largest bank in the world. The bank originated in Hong Kong...
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