British bank customers lost £207 million last year to scammers hoodwinking them to send cash to bogus accounts – a 40% rise on the year before.
But in most cases, banks refuse to accept liability for the fraud and no compensation is paid.
The rip-off is called ‘push payment’ or ‘authorised push payment (APP)’ and involves someone controlling a bank account as an individual or for a business sending money to a fraudster’s account believing the transaction is genuine.
What is push payment fraud?
Victims cannot reverse the payments as real-time money transfers are not reversible and by the time the payee realises they have been conned, the money has gone.
- Sending out false invoices that resemble those issued by a real company
- Scammers telephoning and posing as lawyers, the police or fraud investigators suggesting you should transfer your money to a safe account
Banks have a solution – confirmation of payee, which is a sophisticated technology process that checks the account holder at the bank receiving the transfer is genuine. But they have failed to agree how to run the system and repeatedly delayed implementation.
Reclaiming lost money is almost impossible.
If a crook is convicted of scamming you, a court may order them to pay compensation, but few scammers are caught and those who are have little or no assets to repay victims.
Out of the millions lost last year, only £60 million was repaid by the banks – a 29% success rate.
Making a push payment compensation claim
Banks argue that because the customer has made the payment, they have no liability and the customer should have checked the details before transferring the money.
For a successful claim, a push payment victim must prove the bank was to blame for the fraudulent transfer.
In some cases, the Financial Ombudsman will take on the complaint, but the process takes time and often result in no compensation.
If the scam was the result of a data breach, the chances of compensation are better if the Information Commissioner rules the bank was at fault for the loss of your personal information.