Fraud victims lose £28K to bank transfer scams every hour, Which? reveals

Victims are losing more to bank transfer scams every hour than the average UK worker earns a year, Which? research reveals, as the consumer champion calls on the government to urgently act on its commitment to legislate for mandatory reimbursement of victims.

A voluntary reimbursement code on bank transfer scams, also known as authorised push payment fraud (APP), was introduced in May 2019, and most major banks have signed up. It instructs them to not only reimburse all customers who are not at fault, but also provide them with adequate support.

However, Which?’s analysis of UK Finance figures show that between July 2019 and the end of June 2021 a total of £854 million was lost across 306,573 cases of APP fraud, and only 42 per cent of losses was returned to the customer.

As a result, £495 million has not been reimbursed, meaning customers have been left to shoulder net losses at a rate of £4.7 million a week, £676,881 a day or £28,203 a hour.

This means that victims have lost more to bank transfer fraud every hour than the average UK employee earns in a year (£25,971).

It is now almost three years since the reimbursement code, which banks helped to design, came into force, but the large numbers of scams still taking place and the huge sums of money being lost highlight how systemic issues with protections for this type of crime remain.

The current reimbursement lottery leaves many victims facing an uphill struggle to recover their money, as the code has been applied inconsistently and often wrongly by many firms. The regulator has stated there are significant issues with the code, and Which? has heard from countless victims who claim they have been unfairly treated by their bank.

In one example, a Santander customer in his 80s was left more than £3,600 out of pocket after falling victim to an impersonation scam on WhatsApp. The scammer posed as his son on the messaging service before tricking the victim into transferring money to an account to supposedly help pay for a bill.

The bank initially refused to make any reimbursement after weeks of investigating the case, despite the sophistication of the scam and the victim’s age. It was only after Which? helped the victim write a complaint letter that the bank agreed to give a full refund.

Which? has seen a rise in WhatsApp scams, also known as the ‘mum and dad scam’, where fraudsters pose as family members in order to manipulate victims into transferring money. Which? found that one in five social media scams reported to its scam sharer tool between March 2021 and January 2022 involved WhatsApp.

Since Which? launched its super-complaint back in 2016, the consumer champion has been calling for the regulator and the banks to introduce a fair system of reimbursement for victims of bank transfer scams.

However, losses from APP fraud have risen year on year, and despite a voluntary approach providing an increased level of protection for some consumers, the regulator has admitted that reimbursement levels have been significantly lower than it expected.

The Lending Standards Board and Financial Ombudsman Service have also repeatedly found issues with inconsistent and unfair treatment of victims, and the government has needed to intervene.

While the government’s commitment to legislate for mandatory reimbursement of victims is positive, the situation for consumers will not improve unless changes are brought in swiftly, and it is clearer when firms should refund victims. Which? believes that a reimbursement obligation should be placed on payment providers, with clear liability rules set out in legislation.

The consumer champion is also calling on the Payment Systems Regulator to ensure it is ready to act the moment that legislation is passed and set out a clear direction for how it will finally reduce the financial harm suffered by victims.

Rocio Concha, Which? Director of Policy and Advocacy, said:

“Despite huge sums being lost to bank transfer scams on an hourly basis, low reimbursement rates based on inconsistent and unfair decisions by banks demonstrate how the voluntary code isn’t providing the safeguards promised to victims.

“While commitments to make reimbursement mandatory were a huge win for consumers, it’s vital that the government introduces the right legislation that will ensure victims get fair and consistent treatment.

“The regulator must also ensure it is ready to introduce and enforce mandatory reimbursement rules the moment that this legislation is passed.”


Case study

John Andrews, in his 80s, was the victim of a sophisticated impersonation scam, losing thousands of pounds after fraudsters posing as his son on WhatsApp manipulated him into transferring money.

John was asked by the scammer purporting to be his son if he could transfer money to an account to pay for a £3,600 bill due to issues his son was having setting up an online payment. The HSBC account he was asked to transfer the money to was not in his son’s name, but he thought it might be a friend who he owed money to, so he went ahead. When John talked to his son shortly after, he said he had sent no such message

After several weeks spent investigating, his bank Santander refused to refund him. But Which? believed that John had a reasonable basis to think he was talking to his son and Santander should have taken the customer’s vulnerability into account, including his age. After Which? helped the victim write a complaint to Santander, the bank decided to refund him in full.

Right of replies

A Santander spokesperson said: “We have a great deal of sympathy for Mr Andrews and all who fall victim to the criminals who carry out these scams. Having reviewed the individual circumstances of Mr Andrews’ case, we have fully refunded the money transferred as part of the scam.”

Tips for avoiding a WhatsApp scam

  • If you’ve been contacted by someone you know on WhatsApp, but on a new number, and asked to make a payment – stop, this is a scam.
  • Speak to the person you believe is requesting the money before making any payments, either face to face, or by calling on their old number – do not use WhatsApp to complete the call.
  • Remember: if something doesn’t feel right, it probably isn’t.

Notes to editors:

  • Losses from APP scams are calculated from the UK Finance 2021 Half Year Fraud Report, and include only personal losses
  • Between July 2019 and June 2021, there were 306,573 cases of personal APP fraud recorded by UK Finance, representing losses of £854 million. Of these losses £360m was returned to the customer, leaving £495m of non-reimbursed losses. The Contingent Reimbursement Model code was introduced around one month before this period on 28 May 2019
  • The Office for National Statistics’ Annual Survey of Hours and Earnings estimated median annual earnings for a UK employee in 2021 were £25,971. This includes both full-time and part-time employees
  • Banks wrongly denying fraud victims compensation in up to 8 in 10 cases, Which? reveals

About Which?

Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.

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