Consumer group Which? says banks are backsliding on commitments to reimburse customers who have been tricked into sending money to criminal accounts.
The voluntary Contingent Reimbursement Model code, in place since May 2019, compels banks to reimburse blameless victims of authorised push payment fraud, in much the same way as they do for scams related to card payments and direct debits.
Yet early signs suggest that banks are shifting responsibility onto customers, claims Which?, by refusing to cover losses on the basis that they show fraud warnings at the point of payment.
The consumer group cites examples from people who were told they won’t get their stolen savings back purely because they ‘ignored fraud warnings’ - "even where it seems unfair to expect them to have behaved differently". Some said their bank seemed ‘uninterested’ in the specific details or nature of the scam, even though this could inform their assessment.
The code stipulates that fraud warnings must be ‘understandable, clear, impactful, timely and specific’ but individual banks are free to interpret this as they see fit.
Some ask users to select a payment type, such as paying a friend or buying goods, so that they can show fraud warnings specifically tailored to the associated risks. Others display a more generic message about bank transfer fraud.
Which? cites academics Petko Kusev, Joseph Teal and Rose Martin from the Behavioural Research Centre of Huddersfield Business School, who believe that warnings without specific instructions are highly unlikely to be influential.
Patrick Fagan, a consumer psychologist from Goldsmiths, University of London, also thinks warnings are less effective if they don’t speak to customers in their own language, and may be ignored as they become ‘part of the furniture’, particularly if banks don’t occasionally modify the text, placement and design.
Which? wants banks to provide evidence that their warnings are effective, as per the code, and suitable for different groups of people and under different circumstances.
"Until they have, it’s hard to see how any bank could justify refusing to reimburse victims simply for ignoring a warning," the consumer group says.