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Which? rates banks on fraud response

Some fraud victims wait too long for a refund

Credit card

A new Which? investigation reveals that banks are inconsistent when it comes to handling bank fraud claims.

Banks must refund customers immediately unless they have grounds to suspect wrongdoing. However, 29% of victims in our survey were left waiting between one and four weeks, while 7% waited even longer. We found that 64% of card victims were reimbursed within a week.

Although banks seem to take fraud seriously, they don’t always investigate cases properly. The Financial Ombudsman Service (FOS) told us that in many cases it sees banks base decisions ‘on a hunch’, potentially leaving victims out of pocket and feeling like suspects for crimes they didn’t commit.

Three in five Which? members have experienced bank fraud with 64% of these in the past two years.

A quarter of cardholders told us they lost nothing because the transaction was blocked. When they did lose money, average losses were £624 for credit cards and £677 for debit cards, although almost all victims got their cash back eventually.

Online banking fraud increased by 48% to £60.4m from 2013 to 2014, while overall card fraud losses rose by 6% to £479m, according to Financial Fraud Action UK. Visit our guide to find out more about how fraudsters access your bank account.

Best firms for handling bank fraud

We asked members to rate their provider’s overall response to bank fraud they experienced. Of the credit card providers, John Lewis led the way, with 93% regarding it as ‘good’ or ‘excellent’.

Debit cardholders were generally less satisfied with the overall response from their bank. Barclays came bottom, with only 61% saying it was ‘good’ or ‘excellent’ and 15% rating it ‘poor’ or ‘very poor’.

For more details see our full table of bank fraud handling results.

Best and worst for dealing with bank fraud
  Communication after
the fraud occurred
Guidance on how to minimise
future risk of fraud
Overall response
Top three credit card providers
John Lewis/Waitrose (76) 86% 62% 93%
M&S Bank (50) 88% 61% 92%
Co-operative Bank (30) 80% 90%
Bottom three credit card providers
Tesco Bank (69) 75% 59% 83%
Lloyds Bank (31) 74%
Halifax (34) 56% 68%
Top two debit card providers
Lloyds Bank (58) 79% 69% 88%
Nationwide (48) 77% 74% 85%
Bottom two debit card providers
HSBC (34) 59% 58% 76%
Barclays Bank (54) 55% 56% 61%

Table notes: Which? surveyed 3,339 members online about card fraud in July 2015
Percentages indicate providers rated good and excellent. Sample sizes in brackets. Sample sizes for different questions varied. A dash indicates that the sample size wasn’t big enough to quote results.

Members said they were pleased when banks reacted quickly, but there were inconsistencies between experiences with the same providers. For example, one John Lewis customer found the company ‘difficult to communicate with’, while another reported ‘first-class work’. 

Many members told us they were frustrated that providers wouldn’t reveal how the fraud had occurred, making it hard to know how to avoid future incidences. Sometimes safety measures taken by banks seemed like fraud attempts themselves, for example messages and texts that people initially thought weren’t genuine.

Companies getting it wrong on bank fraud

If your provider refuses to refund you after you’ve been defrauded, the first step is to try to resolve it through its internal complaints process. If that doesn’t work, you can get in touch with the FOS. Around one in four complaints relating to fraud and disputed transactions at the FOS are upheld in the consumer’s favour. 

We submitted a Freedom of Information request to the FOS to see which firms are getting it wrong. 

Barclays customers are at particular risk of getting a raw deal. The FOS ordered the bank to pay up in 56% of cases about disputed transactions between April 2014 and March 2015. Almost as many Santander customers (47%) were wrongly denied compensation, compared with just 22% for NatWest. See the full table of FOS complaint results to find out how your bank performed. 

Barclays and Santander responded to our findings. Both said they take fraud very seriously and are committed to preventing and detecting fraud, while fully supporting affected customers. Barclays added that it continually reviews its processes to enable colleagues to effectively support customers and improve their experience when reporting fraudulent activity. 

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