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26 Oct 2017

Barclays to 'intervene' in suspected fraud transfers

New system will question users over suspicious payments

Barclays has become the first UK high street bank to introduce a new 'fraud intervention service' that alerts consumers if a transaction seems suspicious.

From today, the new system will automatically intervene when a customer using its online banking platform tries to make a payment that appears suspect or out of character.

The move comes after Which? filed a super-complaint urging for reform in the banking sector to better protect consumers from bank transfer fraud.

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Customers encouraged to 'stop and think'

Under Barclays' new security measures, customers are alerted to the potential for fraud at the point of making an unusual payment.

When a suspicious payment is flagged, Barclays customers will be askedthree questions to identify whether they are a likely victim of a fraudster - for example: 'Has someone just called you saying they are from your bank asking you to move money to a 'safe' account?'.

Barclays say the questions are designed to encourage customers to have a 'stop and think' moment, and consider whether the request to make a payment came from a genuine source.

Customers who believe they have been tricked into transferring money to a fraudster can get support by calling Barclays, using the number on their card. In addition, Barclays will attempt to text or call customers to confirm a payment is genuine.

Find out more:how to spot a scam - our top tips

What is a bank transfer scam?

Bank transfer scams occur when a victim transfers money to a scammer in the belief they are making a legitimate transaction. In some cases, victims believe they are paying for goods or services that never arrive; in others, the scammers impersonate a legitimate organisation and misdirect funds into their own accounts.

The Payment Services Regulator has previously estimated that at least tens of thousands - if not hundreds of thousands - of people fall victim to such schemes every year, and the sums involved can be life-changing.

Currently, consumers who are tricked into paying money to fraudsters have no legal right to get their money back from the bank - unlike the victims of credit card or debit card fraud.

Find out more:Which? scam reporting tool - share your story

Which? calls for greater protection from scams

On 23 September 2016, Which? launched a super-complaint to the PSR, calling on it to investigate whether banks are doing enough to protect consumers from bank transfer scams.

In its formal response in December 2016, the PSR found that the way banks work together needs improvement, and that more could be done to identify fraudulent payments. In addition, the regulator launched a program aimed at reducing fraudsters' ability to perpetrate scams and helping victims recover their money.

The next update from the PSR is due on November 2017, when it will report on the progress by the banking sector towards tackling this issue.

Ahead of the next update, Which? is calling for the banking sector to show clear progress on a number of measures, including robust guidelines for financial institutions to support victims of scams and the adoption of best practice across the sector.

If you want to see the government do more to protect you, sign our petition to force action against scammers.

Find out more:Scams super-complaint: consumers still at risk one year on