Which? reveals the banks most often found to be treating transfer scam victims unfairly

Which? today reveals which banks are most often found to be treating authorised fraud victims unfairly, with some firms getting decisions over scams and reimbursement wrong in nearly nine in 10 cases.

Most major banks have signed up to a voluntary reimbursement code on bank transfer scams, also known as authorised push payment fraud (APP), which not only instructs them to reimburse customers who are not at fault, but also to provide them with adequate support.

However, the number of new authorised fraud complaints – the vast majority of which are APP – made to the Financial Ombudsman Service (FOS) more than doubled in 2020-21, from 3,600 to 7,770. Three-quarters (73%) of these were upheld in favour of the customer. Authorised fraud also includes some card fraud, where the dispute is about whether the consumer authorised a payment or withdrawal with their card.

Figures obtained exclusively from the FOS by Which? show that NatWest and The Royal Bank of Scotland (RBS) – part of the same banking group – are getting it wrong in nearly nine in 10 (86%) cases, with Santander (82%) and Bank of Scotland (81%) following closely behind. While challenger bank Starling (80%) also had a high complaint uphold rate, this was based on a much smaller number of closed cases than other firms.

Fraud complaints against Lloyds Bank (78%), Revolut (77%) and Nationwide (74%) are also being upheld in favour of the victim. Aside from Revolut, all of these banks are signed up to the voluntary scams code.

The figures shine a light on how individual firms have been dealing with bank transfer scams, where customers have been unhappy with their banks’ response and taken their complaint to the FOS. However, Which? has called for much greater transparency about firms’ behaviour and approach to reimbursement – which would require the Payment Systems Regulator (PSR) to make banks regularly publish data, including their reimbursement rates for all of the APP fraud cases they handle each year.

The figures also indicate the banks working with the FOS to settle cases quickly and those that are dragging their heels and making scam victims suffer for months, or even more than a year. On average, in the last financial year, it took nine and a half months for the FOS to resolve an authorised fraud complaint.

While 40 per cent of all complaints to the ombudsman are resolved within three months, this figure is just 20 per cent for complaints about authorised fraud.

But firms can resolve batches of complaints before they get to ‘view’ stage (before an investigator reviews the evidence of both parties). While this still means too many victims are being forced to fight for a fair outcome, early resolutions do at least indicate which banks are willing to learn from past cases.

The FOS data shows that NatWest is very proactive when it comes to settling complaints before a view is issued, having settled 465 cases in relation to authorised fraud complaints covered by the voluntary reimbursement code since April 2020.

In stark contrast, HSBC settled fewer than 10 cases early, Santander settled 16, and Lloyds Banking Group – which includes Bank of Scotland and Halifax – settled 82. All three also had a disproportionate number of authorised fraud cases still open at the end of the last financial year.

The current reimbursement lottery leaves many victims facing an uphill struggle to recover their money when they have been targeted by criminals through no fault of their own.

That is why Which? wants the government to swiftly make the necessary changes to enable the Payment Systems Regulator (PSR) to introduce mandatory APP fraud reimbursement obligations on all firms using Faster Payments, with a robust regime of regulatory oversight and enforcement.

Jenny Ross, Which? Money Editor, said:

“Fraud can have a devastating financial and emotional impact on victims, so it’s shocking that so many banks are failing to handle cases correctly, often wrongly and unfairly denying victims reimbursement. It’s clear banks can’t be trusted to make the right decision when it comes to reimbursing their customers who’ve fallen victim to APP scams.

“The payments regulator must urgently introduce mandatory and more robust requirements for all payment providers, to ensure that customers are protected and treated consistently when they fall victim to bank transfer scams. The government must swiftly take the necessary action to enable the regulator to introduce a reimbursement obligation on all firms using Faster Payments.”

Notes to editors

Case study

One woman told Which? she lost £7,000 in just four hours after falling victim to a complex remote access scam, but her bank Santander initially refused to refund her as it believed she willingly made the payment.

The scam caller, claiming to be a BT engineer, warned her that her IP address had been hacked, but reassured her that they could remotely fix the problem. Panicked and dependent on reliable broadband for her job, she agreed to install TeamViewer.

Unaware that her computer was now controlled by the caller she was shown a list of exposed IP addresses that ‘proved’ hers was at risk. She was then told to log in to her email, shopping and bank accounts to ensure that these were secure. She lost thousands of pounds in a matter of hours.

She took her complaint to the FOS, which ruled that her bank had failed to provide impactful warnings. It was also satisfied that she had a reasonable basis for believing she was speaking to a genuine BT engineer. The bank had to refund her in full, plus 8% interest as compensation.


  • New and closed complaints to FOS about authorised fraud 1 April 2020 – 31 March 2021. Excludes firms with fewer than 10 complaints.
  • Data includes authorised push payment (APP) fraud as well as cases that did not involve a push payment e.g. where the dispute is about whether the consumer authorised a payment with their card.
  • The uphold rate doesn’t directly relate to closed cases, as closed cases include those withdrawn by the consumer, or that the FOS decided it can’t or shouldn’t investigate.

Right of replies

A HSBC UK spokesperson said: “HSBC UK adheres to industry standards and where a report of fraud is received we take appropriate and timely action. We independently investigate every case on its own merits to ensure fair and reasonable outcomes for our customers.”

A Lloyds Banking Group spokesperson said: “Helping keep our customers’ money safe is our priority and we have sophisticated, multi-layered defences in place as well as a dedicated team working 24/7 to help protect them against scammers. We continue to work closely with FOS to help ensure we get it right first time for our customers.”

A Nationwide spokesperson said: “Protecting our members from these scams is one of our biggest priorities. The industry has seen a significant rise in Authorised Push Payment scams in recent years, which are growing in sophistication and exploiting any consumer lack of awareness of the financial system, or preying on vulnerabilities and convincing them to send money elsewhere. Nationwide members are also experiencing more scams, though the increase has not been quite as steep.

“But the increase has led to more complaints where the scam is successful, some of which are historic and predate the measures being put in place to address the issue, or where we believe the member is responsible for the loss. The cases require careful consideration and each is assessed on its own merits, taking into account steps taken by the members to protect themselves, our own actions and wider factors such as any vulnerability. We work openly and closely with the FOS to understand its views on these cases and continue to make enhancements to fraud/scam measures as a result.

“We continue to monitor transactions round the clock and we are investing more than ever in educating our members to protect themselves, as well as launching initiatives such as our unique Scam Checker Service, which enables a member to check any payment they are about to make with us. If we give the go ahead and the member is subsequently scammed, they will be guaranteed reimbursement. Since launch at the end of September, the service has checked over 87,000 and provided the greatest level of protection available over them.”

A NatWest spokesperson said: “At NatWest, our proactive stance and relationship with Fos has brought forward the settlement of many of our cases earlier than required…As a result of this our overturn rate for the period is inflated, we do however expect to see this normalise in 2022.”

A Revolut spokesperson said: “The increase in APP fraud is an industry wide issue. Revolut has extensive and ever improving measures, deploying AI tools and a range of customer warnings and interventions to detect, disrupt and prevent fraud. We communicate frequently with customers to help them spot and avoid fraud. We are also working with industry stakeholders and policy-makers to try to achieve greater safeguards to protect customers by strengthening the draft Online Safety Bill now in parliament.

“Revolut has been proactive in its approach with APP cases at the FOS. We work in line with the FOS guidance on early settlement of cases that meet their APP refund criteria and share best practice to ensure that we continue to develop and maintain a control framework that protects customers. We approach the question of customer reimbursement with care and have enhanced our review process since the period of this FOS report. We believe our policies strike the right balance between supporting customers who have lost funds through no fault of their own and reminding customers to heed the warnings and safeguards we provide. Revolut’s key concern is to reduce fraud affecting our customers and we will continue to work to this end.”

A Santander spokesperson said: “We have a great deal of sympathy for all those who are victims of the criminals who carry out fraud. We invest a great deal in protecting our customers against fraud, raising awareness of scams and fraud, and working closely with FOS, as well as other industry bodies, to ensure customers are treated fairly.”

A Starling spokesperson said: “We have studied the FOS data that you are basing your findings on and we would question your conclusions. Starling Bank has only had 29 of 120 new cases resolved in the relevant period. This is too small a number of resolved cases to be statistically significant. This is especially true when you are comparing Starling with other banks, let’s take Barclays as an example, where 823 of 988 cases have been resolved or NatWest, where 788 of 854 cases have been resolved.

“In addition, the fact that there is such a wide variation between banks in the proportion of resolved cases further undermines your conclusions about what constitutes the average rate. Overall, we note that, based on this data, Starling accounts for 0.6% of the cases upheld against all banks.

“Where cases are resolved one way or another, we take on board the FOS’s findings. We operate a Payment Review Model, which we continuously seek to improve in line with scam trends with our aim to prevent customers from making fraudulent payments.”

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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