More bank transfer scam victims could get their money back - here's how

Nobody wants to discover they've fallen prey to a financial scam. Some good news though - people who've been tricked into transferring money directly to a fraudster now have a new safety net, which should mean they have a better chance of getting a refund.

Some £354 million was lost to bank transfer fraud last year - most of it stolen from personal accounts. Financial providers were able to return £83 million or 23% of the losses - meaning many victims were left out of pocket.

But a new industry code has been put into action, with a funding pot available for blameless scam victims.

Here's a look at why the code has been introduced and how it works...

What's the background?

Sophisticated scams have been persuading people to transfer money themselves directly to criminals - only to realise after the money has disappeared that they have been conned. Scams could start with emails, texts and cold calls, and people could be persuaded they are transferring money to a legitimate organisation such as their bank or another business.

Scammers put victims under pressure so they don't have time to think, in some cases saying they need to transfer money urgently to a "safe" account. People in such situations have transferred large amounts in some cases, and because they authorised their bank to make the transfer, they may have lost their cash for good.

By contrast, in cases where scammers steal money from people's accounts without their knowledge, blameless victims can generally expect to be refunded.

So what's happened now?

The new code has been introduced as part of a wider fightback against this type of scam - known as authorised push payment (APP) fraud. It means victims who were tricked into transferring money but took reasonable care are much more likely to get their money back - even in circumstances where the customer's bank has also done everything reasonably expected of it to protect the customer.

The industry has committed to provide initial funding for these "no blame" situations until the end of 2019. A longer-term funding pot should be agreed by January 2020.

Is my bank taking part?

The code is voluntary, so not everyone has signed up to it. The banking brands which have committed to implementing the code include Barclays, HSBC UK, First Direct, M&S Bank, Lloyds Bank, Halifax, Bank of Scotland, Intelligent Finance, Metro Bank, Nationwide, Royal Bank of Scotland, NatWest, Ulster Bank, Santander, Cahoot, Cater Allen and Starling Bank.

Meanwhile, TSB has made its own fraud refund guarantee to customers, which aligns with the code but also goes further to cover some situations which may not be covered by other banks.

TSB says it's finding that, when customers have the peace of mind of knowing they will be refunded, they are opening up about what happened - giving the bank the full picture so it can better protect customers for the future.

What else is being done to protect people from this type of fraud?

A name-checking service called "confirmation of payee" is also in the pipeline. The Payment Systems Regulator (PSR) has proposed that the UK's six biggest banking groups, which are involved in about 90% of bank transfers, fully put the confirmation of payee measures in place by March 31, 2020.

Confirmation of payee works by making sure the name of the account someone is sending money to matches the name they have entered. Alerts will notify the payer when there has not been a match - meaning corrections can be made before the payment is sent rather than people trying to claw the money back after the cash has been transferred.

What pitfalls should I watch out for?

While blameless scam victims should find it easier to get a refund, if you've been extremely careless then you shouldn't expect to get your money back under the code. People still generally have a responsibility to protect themselves before they can expect to be reimbursed. This could include paying attention to any warning signs from their bank, and having a reasonable basis for believing the payment recipient was legitimate.

But the code also acknowledges scams may be so convincing that even someone experienced in making payments couldn't protect themselves. While the voluntary code provides a new safety net, it's best to avoid getting scammed in the first place.

So always take time to think and check if you're contacted out of the blue about making a payment. Report any suspect approaches from people to Action Fraud and tell your financial services provider.

Help to avoid scams is available at takefive-stopfraud.org.uk.

HOW... OVERDRAFTS SHOULD BECOME SIMPLER AND EASIER TO COMPARE

A radical shake-up of overdrafts from April next year has been confirmed by the Financial Conduct Authorit. Plans include stopping banks and building societies from charging higher prices for unarranged overdrafts than for arranged overdrafts. Fixed fees for borrowing through an overdraft will also be banned - calling an end to fixed daily or monthly charges, and fees for having an overdraft facility. Other changes include requiring banks and building societies to advertise arranged overdraft prices with an APR (annual percentage rate) to help customers compare them against other products.

The overhaul should make it easier for people to see if they would be better off elsewhere - perhaps by getting an overdraft with another bank instead or a different product such as a personal loan which may work out less expensive in the longer-term. Banks and building societies will also be required to do more to identify customers showing signs of financial strain or in financial difficulty.

Overdraft charges are big business for banks. In 2017, firms made more than £2.4 billion from overdrafts alone, with about 30% from unarranged overdrafts. Charges have also been concentrated on a small number of customers. More than 50% of banks' unarranged overdraft fees came from just 1.5% of customers in 2016.

POUNDNOTES

Financial fact: The number of buy-to-let mortgage products on the market has reached its highest levels since the start of the financial crisis, according to Moneyfacts.co.uk. By June, there were 2,396 products available, is the highest figure since October 2007. But there was also some less good news for landlords, as average buy-to-let mortgage rates have increased over the past 12 months, with the average two-year fixed-rate mortgage increasing from 2.88% in June 2018 to 3.05% in June 2019.

ONE IN FOUR SAY THEIR SAVINGS WOULD LAST LESS THAN A MONTH

One in four people could cope for less than a month if they relied solely on their savings to cover their outgoings, research BY Yorkshire Building Society has found. One in six (15%), meanwhile, said they have no savings at all.

TICKET FRAUD WARNING DURING FESTIVAL SEASON

Victims of ticket fraud are losing an average of £365, according to Action Fraud, which last year received 4,755 reports of ticket fraud.

Action Fraud is partnering with the Society of Ticket Agents and Retailers (STAR) to urge people to take more care when buying tickets for live events. Fraudsters will pose as a website or agent for a music concert or festival, a sporting contest, or a live comedian or performer, meaning victims will purchase tickets that either don't arrive or turn out to be fake.

PUSHY SALES TACTICS 'TOP TURN-OFF FOR CAR BUYERS'

A reputation for pushy sales tactics and negative online reviews are the top reasons why drivers would be deterred from visiting or buying from a used car dealer, analysis by AA Cars, the AA's used car website, has found. A reputation for pushy sales tactics would dissuade nearly a fifth (19%) of motorists, while 18% of car buyers see negative online reviews of a dealer as a turn-off.

The survey of more than 17,200 drivers found that other turn-offs include a dealer who is reluctant to allow a reasonable test drive, cars that do not look as though they been cleaned or moved for a long time, and a dealer's lack of familiarity with the cars for sale.