Bank transfer fraud victims are getting less than half their money back in compensation

Bank transfer fraud victims are getting less than half their money back in compensation

Since the introduction of a voluntary code last year,  victims of fraud only get  an average of 48% of their money back

Stephen Little
Mon, 01/13/2020 – 12:46


Authorised push payment (APP) fraud victims are getting less than half of their losses back in compensation from banks following the introduction of a new industry code to protect consumers, according to figures from secure payments provider Shieldpay.

APP scams are where people are duped into authorising a payment into the account of a scammer.

Shieldpay says that victims of APP fraud get back 48% of their money on average. This means victims face a shortfall of £3 billion pounds in compensation received, while 15% get no compensation at all.

In most cases, victims of unauthorised fraud receive a full refund, however, those who have lost money due to APP scams do not receive the same protection.

In the first half of 2019, £207.5 million was stolen from UK bank customers in APP scams, according to figures from UK Finance.

A new industry voluntary code offering consumers protection from APP fraud was introduced in May last year.

Customers of banks that have signed up to the code will be reimbursed for their losses provided they have taken reasonable care.

If the bank and the customer have not followed the requirements of the code, then only some of the money may be repaid.

Banks that have signed up to the voluntary code include Barclays, HSBC, Lloyds Banking Group, Metro Bank, Nationwide, Royal Bank of Scotland, NatWest, Co-op and Santander. TSB has its own fraud refund guarantee which reimburses customers who have been victims of fraud.

However, a number of major providers, including Tesco, Monzo and Virgin Money, have yet to commit.

Peter Janes, CEO and Founder at Shieldpay, says: “The voluntary code introduced last year is a positive step but compensating victims is simply fire-fighting without tackling the source of the problem.

“Fraudsters must be stopped in their tracks and consumers protected against transferring money into accounts which are held by scammers.”

How are fraudsters targeting victims?

Push payment fraudsters are becoming increasingly sophisticated, frequently posing as someone who has been employed by the victim, such as a builder of solicitor.

The criminals then send the victim a fake invoice to get them to send money to a bank account controlled by the fraudster.

Fraudsters use a number of different methods in order to trick unsuspecting victims out of their cash.

Shieldpay says that victims are most likely to be targeted over the phone (27%) and on social networking sites (22%).

Over one in five (21%) victims are contacted in person by door-steppers, 16% by clicking on a fake ad, 15% when making a purchase online and 12% on an online dating site.

Janes says: “Blameless victims of APP fraud are being left thousands of pounds out of pocket while fraudsters continue to let the good times roll. It shouldn’t be this way,

“The industry must do more to protect consumers. Full identity verification and background checks, which raise red flags about a business’s or individual’s history, are the only way to make a dent in the sky-high levels of fraud the country is currently experiencing. The technology exists but it’s the responsibility of the individuals and the payments industry, including online marketplaces and banks, to put it in place.”

What to do if you are a victim of a bank transfer scam

The first thing you should do is contact your bank immediately to report the scam. It should then contact the bank you paid the money to and try to get it back.

If your bank as signed up to the Contingent Reimbursement Model (CRM) Code, and the fraud happened after 28 May 2019, you can try to get your money back.

Under the new voluntary code banks will reimburse customers for their losses provided they have taken reasonable care.

This will depend on whether the victim ignored the bank’s warnings of the scam or was “grossly negligent” when transferring the money.

If you have contacted your bank and you are still unhappy you can then make a complaint to the Financial Ombudsman.

How to avoid bank transfer fraud

A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account.

Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by.

Don’t be tricked into giving a fraudster access to your personal or financial details. Never automatically click on a link in an unexpected email or text.

Always question uninvited approaches in case it is a scam. If you receive an email asking you to change your payment details make sure you contact the firm or bank directly to check them. Don’t rely on emails as the could be fake.

Never rush a payment as a genuine organisation will be quite happy to wait.

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Failure to claim benefits costing some pensioners more than £1,500 every year

Failure to claim benefits costing some pensioners more than £1,500 every year

Retired households could boost their income by applying for key state benefits. 

Brean Horne
Mon, 01/13/2020 – 11:26


Pensioner homeowners are missing out on thousands of pounds of extra income by failing to claim their full entitlement to state benefits, according to the latest Just Group annual state benefits survey.

Nearly half (46%) of retired homeowners are failing to claim any state benefits at all causing them to miss out on an average of £1,423 in 2019 up from £1,139 the previous year.

The three key state benefits that can be claimed by pensioners are guarantee pension credit, savings pension credit and a council tax reduction.

Guarantee pension credit, which tops up your weekly income, so it reaches a minimum sum set by the government, has the highest take up with 85% of eligible retirees claiming it. 

Those failing to claim guarantee pension credit miss out on an average of £1,690 a year.  

Only 42% of entitled pensioners claim a council tax reduction, losing an average of £801 a year. 

Savings pension credit – an extra payment from the government to reward you for savings towards your retirement – has the lowest take up with just 21% of eligible people claiming.

Failing to claim could cost an individual £453  per year.

Overall 42% of those eligible to claim are missing out on the key benefits, 14% are missing out on two and 1% are missing out on the full three.

Just Group found that some pensioners were missing out on as much as £13,600 a year worth of extra income by failing to claim their full state benefit entitlement.

Stephen Lowe, group communications director at Just Group says: “Our benefits survey reflects official figures which show vast amounts go unclaimed.

“For the two elements of Pension Credit, the government estimates about 1.3 million families are failing to claim up to £3.5 billion a year. 

“The low level of take-up for some of the key benefits raises serious questions about the support being given to help people navigate the complexities of the benefits system.”

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