In a milestone victory for Money Mail, a major High Street bank has become the first to pledge to reunite innocent fraud victims with their money.
We have long campaigned for banks to compensate people when they are tricked into handing over their savings, and have been ignored — until now.
For TSB this week said cheated customers will always get their cash back — piling pressure on other banks to do the same.
Victory: We have long campaigned for banks to compensate people when they are tricked into handing over their savings, and have been ignored — until now
Writing in Money Mail today, TSB executive chairman Richard Meddings admits: ‘Fraud refund policies just haven’t kept pace with the scammers. You don’t have to be frail or foolish to fall victim.’
Scammers dupe us out of about £1 million a day — often by convincing victims they are bank employees, telling them their savings are in danger and must be moved.
In all, £354 million was stolen last year in these scams, known as authorised push-payment frauds. But until now, banks had refused to pay compensation, claiming the victims should have been more careful.
TSB will now only refuse to pay up if someone repeatedly ignores safety advice and is defrauded again and again.
Other major lenders, have signed up to a voluntary code which will require them to refund scam victims from May 28.
Yet funding for cases where neither the bank nor customer is to blame is only guaranteed until the end of the year.
Richard Emery, fraud expert at consultancy 4Keys International, says: ‘I am delighted a bank is taking the reimbursement of scam victims seriously. I trust other banks will follow suit.
TSB has come forward in advance of the official reimbursement model which other banks could have done. Customers of other banks who fall victim to scams between now and May 28 would have a very good reason to be unhappy if they are not refunded.’
But what does the landmark move mean for you?
What are TSB’s terms?
TSB pledges to reimburse all customers who innocently fall victim to scams, with two exceptions. Those who commit the fraud themselves will not be refunded.
Neither will customers who are repeatedly tricked after getting advice from the bank about how to stay safe. This does not apply to vulnerable customers and TSB says the rule is flexible.
For example, it may refuse to refund customers who fall for the same type of scam twice unless they are targeted in different ways.
Do all victims qualify?
TSB’s fraud refund guarantee is not retrospective — those who fell victim to scams before April 14 will not be covered.
Scammers dupe us out of about £1 million a day — often by convincing victims they are bank employees, telling them their savings are in danger and must be moved
Will other banks help?
Customers of other banks currently have no right to a refund if tricked by a fraudster. Banks typically refuse in these instances on the grounds they authorised the payment or were negligent with their banking details — even if they had no idea they were speaking to criminals.
Banks recorded 84,624 cases of authorised push-payment fraud last year, almost double the number reported in 2017, according to banking trade body UK Finance.
In total, victims lost £354.3 million, a 50 pc rise on 2017.
However, RBS, Barclays, Santander, Lloyds Banking Group (which includes Halifax and Bank of Scotland), Nationwide, Metro Bank, and HSBC have all pledged to sign up to the voluntary code.
Which scheme is best?
Richard Emery says TSB seems to cover more situations in which customers can fall victim to scams.
Banks which sign up to the new code can refuse to reimburse customers who ignore scam warnings, whereas TSB may not.
The code also considers whether a customer has tried to protect themselves. The banks will decide this on a case-by-case basis.
Also, as other banks have only agreed funding until the end of 2019, a longer-term solution is needed.
One idea is to pass on a levy to customers. Only Nationwide and Lloyds have pledged to cover the charge themselves.
Mr Emery says banks have known about the code since 2018, and TSB has just acted on it, but with minimum exclusions.
How do I prove fraud?
Keep hold of any emails and text messages. Print off a version for your records. Keep the fraudsters’ account number and sort code in case the bank deletes them.
If you believe you have become a fraud victim, call your bank immediately. Insist on speaking to the fraud team and tell them to contact the receiving bank at once.
Report the crime to Action Fraud, the national cybercrime reporting service. Without a reference number your bank may question why you do not want to alert law enforcement. Action Fraud collects data which allows it to identify trends and criminals.
If your bank decides not to refund you, make an official complaint. If it still refuses, go to the Financial Ombudsman Service.
The Ombudsman has raised the bar on what it considers gross negligence due to ever more sophisticated frauds.
This means if you are tricked into giving away information, such as a passcode used to confirm payments, it will ask the bank to prove you were careless.
- Complain online at help. financial-ombudsman.org.uk/help, call 0800 023 4567, or write to Exchange Tower, Harbour Exchange, London, E14 9SR.
We must hunt down fraudsters like the criminals they are
By Richard Meddings Executive chairman of TSB
Innocent victims should not pay the cost of fraud.
It’s the stories, not the statistics, that hit you; people — normal, law-abiding, money-saving people — who have seen their life-savings wiped out in an instant.
Everyone knows fraud is a growing problem, but nothing prepares you for the devastation it wreaks.
One of the many cases I’ve come across concerned an elderly couple from Aberdeen who took a call from a fraudster and were conned into thinking there had been a security breach on their internet banking. The crook asked them to transfer their money into a safe account and, just a few hours later, he’d swindled them out of thousands of pounds.
We need a hunting mentality when it comes to tracking down fraudsters. The people behind these crimes are cunning and organised.
Financial fraud needs to be treated like the serious crime it is. Banks have a big role to play and they are doing some great work, but we all need to do more. It’s not enough to say that this is a matter for the police to sort out.
That’s why TSB has set up a partnership with the Met Police — and is working with other local forces across the UK — to bring greater support and resources to this issue. Education is critical, so we’re investing in fraud awareness programmes, too. But all of this is irrelevant if you’ve already lost money to fraud.
Increasingly over the past year we’ve been repaying money when customers have made honest mistakes. But what we need now is to go one step further: we need a clear policy that protects customers and ensures no innocent victims are left out of pocket after being taken in by a scam.
Fraudsters are becoming more and more sophisticated and are always devising new ways to attack customers. So, while we continue to invest in fraud-detection measures, these are not enough on their own.
Fraud refund policies just haven’t kept pace with the scammers. You don’t have to be frail or foolish to fall victim. All too often, customers must fight to be refunded and are treated unsympathetically.
So, for all these reasons, TSB has become the first bank to launch a guarantee that any innocent customer who falls victim to transactional bank fraud going forward will be reimbursed. We are incredibly proud of this commitment.