The consumer champion found that some banks were regularly blaming customers for missing warnings or not doing enough to realise that they were being scammed, as reasons to deny people reimbursement. As a result, just 41% of victims who contacted their bank for a refund were able to get their money back.

The code is based on the fundamental principle of fully reimbursing those who have lost money to criminals through no fault of their own. However, in many examples scrutinised by the consumer champion, it claims that firms were unfairly rejecting decisions that met this criteria, leaving people thousands of pounds out of pocket.

Which? contends that banks are relying far too heavily on their own judgements that customers ignored warnings, or have unreasonable expectations of the steps that customers should have taken to verify that the payment was legitimate.

The consumer group believes that if firms are relying on using a customer’s response to warnings to reject reimbursement, then they must demonstrate that these warnings are actually successful at reducing the likelihood of a fraud succeeding.

These warnings should be subject to much more rigorous testing and customer feedback, says Which?, arguing that banks should consider how customers could be manipulated to ignore these alerts, and what changes can be made to the design and wording of warnings to make them more effective.

It also believes that firms need to take a more realistic approach when it comes to making reimbursement decisions based on whether the customer could have done more to verify whether a payment is legitimate.

This is particularly the case when a fraudster is able to spoof legitimate communications, as these practices can fundamentally change the circumstances under which victims are making judgements about who they are transferring money to. Which?’s view is that customers should be reimbursed in the vast majority of these cases.

As well as calling for the scams code to be made mandatory, Which? is also pressing for all payment service providers to submit data on the number and level of bank transfer fraud and reimbursements.

Gareth Shaw, head of money at Which?, comments: “Even as this type of crime continues to surge, the lack of fairness, consistency or transparency across the industry means that the chances of people getting their money back is often a total lottery.
“A voluntary approach to tackling bank transfer fraud has failed. Banks, regulators and government must work together to make the code mandatory and ensure that strong standards on reimbursement are introduced.”