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9 Sep 2021

Banking Protocol stopped £32 million of fraud in the first half of 2021

Are banks doing enough to prevent bank transfer scams?

Anti-fraud measures used by bank staff to protect scam victims stopped £32m of fraud between January and June 2021, according to UK Finance.

Branch staff at banks, building societies and Post Offices worked with local police forces, invoking what is called the Banking Protocol 4,782 times during the first half of the year, leading to the arrest of around 90 suspected criminals.

While any steps to prevent fraud are positive, UK Finance figures back in May showed that more than £700,000 is being lost to bank transfer fraud every day - so there is still much more to do to protect scam victims.

Here, Which? explains how the Banking Protocol works and asks whether banks are doing enough to prevent bank transfer scams.

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How does the Banking Protocol work?

The main aim of the Banking Protocol is to prevent fraud by identifying victims who are being coerced or scammed and try to intervene. It's a UK-wide scheme, launched by UK Finance, National Trading Standards, and local police forces.

Branch staff are trained to spot the warning signs that suggest a customer is falling victim to a scam. Under the Banking Protocol, they should ask the customer questions if they think a transaction is out of character and can call local police forces to step in.

For instance, they may ask what the money is going to be used for, or whether the customer has already been approached by someone claiming to be the police or another bank's fraud department.

If bank staff spot any warning signs while working in the branch they can alert the police, who may investigate the situation in the bank branch and arrest suspects if they are still on the scene.

If the case arises via online or telephone banking, customers are first asked to call customer services or visit their local bank branch so that branch staff can carry out additional checks and use the Banking Protocol if it's deemed necessary.

Bank staff at both call centres and branches can notify police if they believe certain attempted bank transfers have been made as part of a scam.

Are banks doing enough to prevent bank transfer scams?

The Banking Protocol has helped protect thousands of customers against fraud - but as bank transfer scams continue to grow, more needs to be done to make sure innocent victims are getting their money back.

In June, Which? urged the regulator to make banks publish their bank transfer fraud reimbursement rates, after figures released by the Lending Standards Board (LSB) suggested banks were only reimbursing a minority of fraud victims.

The LSB then published a report that found 'systemic failings' in how banks are implementing the voluntary Authorised Push Payment Scam Code.

Issues included failing to let customers know whether or not they are entitled to get their money back within 15 working days, placing disproportionate responsibility on customers, and giving poor information about how reimbursements work.

What's more, we also found some banks are leaving victims of bank transfer fraud in the lurch when it comes to protecting them from subsequent attacks from scammers.

Victims of fraud are vulnerable to scammers getting back in touch with them and offering to help recover their lost money - for a fee. Action Fraud saw 2,096 incidents of recovery fraud between April 2020 and March 2021.

Mandatory rules are needed to make banks do more

Jenny Ross, Which? Money editor, said: 'While it's encouraging to see that the bankingprotocolis helping to prevent a significant number of scams, we still hear regularly of cases wherebankshave failed to spot clear signs of onlinebanktransfer scams and then compounded the victim's misery by refusing to reimburse them.

'It's clear that banksare failing to properly apply the voluntary code to help victims of authorised push payment scams, with twobankspinning the blame on customers in more than nine in 10 decisions.

'The payments regulator must urgently introduce mandatory rules to ensure banks do more to protect consumers against these scams - through prevention, but also by reimbursing all blameless victims.'

How to get your money back if you're a victim of bank transfer fraud

Bank transfer fraud, also known as authorised push payment (APP) fraud, is when victims are tricked into moving money out of their account themselves - usually due to being targeted and lied to by scammers.

If you think you've been scammed, you should contact your bank immediately. The quicker you are, the more likely your bank will either be able to stop the transaction from going through or recover the money.

You should also contact the bank you were told to send the money to, providing it with the account number given to you by the scammer.

If your bank is signed up to the code, it should reimburse your money, but you'll have to show at least one of the following:

  • you paid attention to warnings it provided before making the transfer
  • you had a reasonable basis for believing the person you were paying was genuine
  • you're considered vulnerable.

If your bank isn't signed up to the code, you should make a formal complaint after reporting the scam.You can use our template letter as a guide.

If your bank refuses to offer you a refund, you may be able to escalate your complaint to the financial ombudsman.