Over £700,000 is being lost to bank transfer scams every day in the UK, revealed the latest research by Which?.
The research comes as part of a call for stronger protections to fix “an unfair and inconsistent” industry approach to reimbursement that currently results in less than half of losses being returned to victims.
According to the study, UK Finance figures show that a total of £412.9m has been lost across 189,000 cases of bank transfer fraud between the introduction of a voluntary industry code on reimbursement in May 2019 and the end of 2020.
This equates to £707,000 a day, £29,000 an hour or £491 a minute. However, only 46% of losses have been reimbursed under the code.
As a result, £225m has not been returned to victims, meaning they have been left to shoulder net losses at a rate of £384,000 a day, £16,000 an hour or £267 a minute.
The code followed by banks regarding reimbursement in these cases states that if the customer is not at fault, they should be compensated, but the Financial Ombudsman Service and others had repeatedly found that banks were incorrectly deciding not to return losses, said the consumer body.
Which? is now calling for changes so that mandatory standards of consumer protection are introduced to provide fairer and more consistent outcomes for victims.
The Payments Systems Regulator (PSR), which has itself said that reimbursement rates are low, is currently considering potential measures that could reduce losses to this type of crime.
Which? strongly backs proposals from the PSR to change the rules of the Faster Payment Scheme, to set mandatory standards for the reimbursement of those conned out of their money, and believes the Treasury must commit to giving the regulator whatever powers it needs to make that happen.
Gareth Shaw, Head of Money at Which? said: “Despite huge sums being lost on a daily basis, low reimbursement rates based on inconsistent and unfair decisions by firms demonstrate how the voluntary code isn’t providing the safeguards promised to victims of bank transfer scams.
“Two years on from the code’s introduction, it is clear that the Payment Systems Regulator must now take decisive action to prevent the continued devastation caused by this type of fraud.
“It needs to introduce mandatory standards of consumer protection for all banks and payment providers, and require greater transparency from firms on how they are dealing with this crime.”