"With scams on the rise, consumers can only protect themselves so far and we believe that banks must do more to tackle bank transfer fraud and safeguard their customers from scams."
The charity says that protections have not kept up with the increasing number of banking transactions "and victims conned into transferring money by bank transfer to a scammer currently have no legal right to get their money back from their bank, unlike with many other payment methods".
Which? research found that six in 10 people didn’t realise they had no consumer protection from their bank if they are scammed into making a bank transfer. Eight in ten people (84%) said they had used bank transfers to make payments and one in 10 (9%) had, or knew someone that had, made a bank transfer payment to a fraudster’s account.
The firm says that although banks have developed and invested in security checks and systems to detect and prevent fraud where they are liable to reimburse the victim, there aren’t sufficient checks if someone is tricked into transferring money directly to another person’s account.
Which? thinks banks should shoulder more responsibility for money lost to scams made by bank transfer, just as they reimburse customers who lose money due to scams via direct debit or credit and debit cards or fraudulent account activity.
Using its legal powers, Which? is making a super-complaint to the Payment Systems Regulator and alerting the FCA. The regulators have 90 days to investigate and respond to Which?’s concerns.
It is asking regulators to formally investigate the scale of bank transfer fraud and how much it is costing consumers and propose new measures and greater liability for banks to ensure consumers are better protected when they have been tricked into making a bank transfer.
Alex Neill, Director of Policy and Campaigns at Which?, said: “We all now regularly use bank transfers to pay for things, but what most of us don’t realise is that if you’re conned into paying out money to a fraudster you stand to lose all of your money, unlike when you use your credit or debit card.
“With scams on the rise, consumers can only protect themselves so far and we believe that banks must do more to tackle bank transfer fraud and safeguard their customers from scams.”
Christopher Woolard, Director of Strategy and Competition at the FCA, responded: “We know that fraudsters can use sophisticated tactics, including phishing and vishing, to dupe even the most financially aware consumers. We will work together with the PSR as they investigate this super-complaint.”
