Ahead of the introduction of a new voluntary code to reimburse customers who fall victim to authorised push payment (APP) fraud, consumer group Which? says that losses from money transfer scams are 'spiralling out of control', with £674 per minute drained from consumer accounts.
Which? bases its calculations on industry figures which reveal that £354m was lost to APP fraud in the last year alone, which equates to £40,445 per hour or £674 per minute.
APP fraudsters have become adept at tricking customers into authorising payments into scam accounts, using a variety of social engineering cons and electronic trickery to dupe their victims into thinking the payouts are legit.
Last year, just 23% of losses were returned, says the consumer group, which is calling on all banks to sign up to the new voluntary code, which comes into effect from the end of the month.
Gareth Shaw, Head of Money, Which?, says: “For too long, victims of bank transfer fraud have lost life-changing sums and subsequently faced a gruelling battle to get their money back.
“By adopting this code, banks must offer much greater protection to consumers, while quickly and fairly reimbursing those who are unfortunate enough to fall victim.
“Failure to do so will require swift intervention from the regulator- as these devastating scams can’t be allowed to derail lives any longer.”
The industry has committed to provide initial funding from the implementation of the Code on May 28th until the end of 2019 to reimburse customers in those situations where both the customer and their payment service provider have acted with due care and attention, the so called 'no blame' scenario. But the issue of longer-term funding for this pot has been a key stumbling block.
“This initial 'no blame' funding is intended to provide the necessary time for the industry to work with the regulators and government to deliver sustainable long-term funding for this reimbursement fund by January 2020," says Stephen Jones, CEO, UK Finance. "We hope the Payment Systems Regulator will do everything in its power to support the industry to ensure a long-term solution can be introduced, including using its regulatory powers if required, to ensure a sustainable 'no blame' funding solution."