You CAN get your cash back from a scam… but banks don’t make it easy

Banks are running out of excuses for denying fraud refunds as exclusive figures show complaints are now emphatically ruled in favour of scam victims.

Money Mail can reveal that nearly three-quarters of authorised fraud and scam complaints handled by the Financial Ombudsman are now won by customers — with banks forced to pay out more than £130 million in the past three years. 

Campaigners say banks should now stop fighting blameless victims and instead focus on improving security to prevent fraud in the first place.

Refunds: Nearly three quarters of fraud refund complaints to the financial Ombudsman are now won by customers – with banks forced to pay out more than £130m in the past three years

Despite promising to abide by a new code of conduct introduced more than two years ago, the biggest High Street providers have failed consistently to treat customers fairly when they have been tricked into making payments to crooks. 

This has led to a soaring number of cases being taken to the Financial Ombudsman Service (FOS) — which handles disputes between financial firms and their customers.

In 2020/21 the free service received 7,770 new complaints from fraud victims tricked into transferring money to criminals — more than double the number dealt with the previous year. It resolved 5,600 of these cases and upheld 73 per cent in favour of the customer.

However, the rise has led to a backlog at the Ombudsman, with long delays leaving many victims in limbo for months on end.

One in four cases took more than 12 months to reach a final decision, while a third took between six months and a year.

Campaigners are urging fobbed-off customers to persevere because there is now a high chance they will win their case. 

Crackdown: Latest figures show £32m of fraud was stopped through the Banking Protocol scheme in the first half of this year – a 65 per cent increase on the same period last year

Martyn James, of complaints website Resolver, says: ‘The banks should not be tying up the Ombudsman’s time with these cases, nor leaving customers in limbo when they know full well they will be upheld.

‘The Ombudsman publishes its decisions on its website and it is vital that banks learn from them and evolve their processes.

‘I am pleased it is taking a much stronger line on the banks, which are failing in their duty of care, and ordering them to reimburse victims of scams. While it can take months to resolve a case, customers should pursue the banks via this route.’

Banks can stop fraud when they try. New figures from industry trade body UK Finance shows that £32 million of fraud was stopped through the Banking Protocol scheme in the first half of this year — a 65 per cent increase compared with the same period last year.

With the protocol, branch staff are trained to detect the warning signs that someone is being scammed and make an emergency call to the police. 

Additional new fraud rules introduced in May 2019 were supposed to ensure scam victims were treated more fairly, with a better chance of reimbursement.

But the code of conduct is voluntary and in more than two years just nine banking groups — including Lloyds, HSBC, NatWest and Barclays — have signed up. TSB has its own fraud guarantee that promises to refund all innocent scam victims.

Blamed for con when dazed and ill

Pensioner John Wardle received little help from Barclays after £6,936 was stolen from his accounts 

Pensioner John Wardle was still concussed after a fall when fraudsters targeted him posing as his bank.

John, 82, was also taking multiple medicines and painkillers following a procedure relating to a prostate cancer diagnosis and he has little recollection of what happened other than he received a phone call concerning the security of his bank account.

However the next morning the former engineer saw three payments totalling £6,936 had been taken from his current and savings accounts. 

John, who lives in Yorkshire, tried to report the fraud to Barclays but gave up after waiting twice for two hours to speak to someone on the phone.

He eventually got through the next day and Barclays promised to investigate and offer a resolution within the three to six weeks.

According to the voluntary code of conduct designed to protect customers from scams, banks should resolve cases within 15 working days — or 35 in exceptional circumstances.

However, it took more than three months and multiple telephone conversations before Barclays offered a reimbursement of just 50 per cent.

They said this was because both he and the bank were to blame. Yet Barclays calculated his refund at only £1,998.

And it was only after Money Mail stepped in that the bank agreed to reimburse the entire amount lost.

A Barclays spokesman apologises for failing to provide the high level of service expected.

Following a further review, it says it now recognises that John had been the victim of sophisticated manipulation.

 

The standards state that those who fall victim to bank transfer scams should be refunded if they have taken care to protect themselves. But banks can wriggle out of reimbursing customers if they can prove they ignored ‘effective warnings’ before making a payment.

This might include a general fraud alert that pops up when customers make a bank transfer to a new payee. But experts have long warned that these warning messages are easy to miss or too general to be effective. 

Yet they are still one of the most common reasons used by banks to deny customers refunds, according to the FOS. Another frequent excuse is that the customer did not have a reasonable basis for believing the transaction was genuine.

But letters seen by Money Mail reveal that the FOS is no longer buying the banks’ excuses.

In July, antiques dealer Kevin Hanson was told by the FOS that he will be refunded by his bank, Lloyds, eight months after falling victim to a scam.

Antiques dealer Kevin Hanson was tricked into transferring £4,100 to a ‘safe account’ in November after being told by a fake bank employee his account had been compromised

He was tricked into transferring £4,100 to a ‘safe account’ in November after being told by a fake bank employee his account had been compromised. 

Lloyds refused to reimburse him because he had ignored a scam warning that flashed up before making the payment.

And as the bank only managed to recover £1,050, Kevin, 64, was left more than £3,000 out of pocket.

However, the FOS said it understood that Kevin, who lives in Derbyshire, would have felt under pressure and may not have taken in everything that was shown. 

It felt Kevin’s belief that he was speaking to Lloyds outweighed the details in the pop-up message and ordered Lloyds to refund the remaining balance plus 8 per cent interest and any charges incurred as a result of the account being left overdrawn.

Kevin says: ‘I feel fabulous to have taken on Lloyds and won, and this should encourage scam victims to pursue their case to the end.’

A Lloyds spokesman says: ‘While Mr Hanson made the payment despite ‘Confirmation of Payee’ flagging the account details provided did not match, and no attempt was made to verify the caller, we have acknowledged the ruling from the FOS and have refunded Mr Hanson.’

Linda and Ralph Brodie have also won their case with the Ombudsman and secured a £10,500 refund. Ralph, 74, had received a phone call in January from a bogus HSBC employee claiming he needed to transfer the money to three new payees to check his account’s security. 

He was reassured no money would be taken and visited his branch in St Ives, Cornwall, as instructed. But 15 minutes after arriving home, he discovered £21,000 of his savings had vanished. 

HSBC said it would only refund half the money because Ralph did not make enough checks to ensure he knew who he was paying.

The FOS said this was unfair, and that it was satisfied an effective warning was not provided, which meant Ralph had a reasonable basis for believing he really was speaking to HSBC. 

The bank says it stands by its original decision but will refund the remaining £10,500 as instructed.

The banks’ code of conduct has been heavily criticised since it was launched in 2019. In December the Lending Standards Board (LSB), which governs the code, released a damning report describing bank scam alerts as vague, ineffective and not good enough. 

And in June this year it identified a number of ‘systemic failings’ in banks’ interpretation of the code. It accused firms of unfairly blaming customers, providing inconsistent information and exceeding the 15-day time limit for investigations.

Gareth Shaw, of consumer group Which?, says: ‘A worrying culture of victim-blaming from banks that are failing to properly apply a code they signed up to often leaves scam victims with no choice but to pursue reimbursement with the FOS, which while often successful can cause unnecessary distress.’

A Financial Ombudsman Service spokesman says: ‘Over the past three years we have seen a 60 pc increase in fraud and scam complaints coming to us. 

Nonetheless, our work has resulted in over £130 million being repaid to victims of fraud. We know the scale of the problem and understand the terrible impact these scams have on people’s lives, which is why we continue to enhance our approach to resolve these complaints as quickly as possible.’

[email protected]

How to get YOUR fraud refund

Write down a timeline of events as bullet points, from start to finish.

Remember to include details that led to the scam, such as whether the phone number the fraudster used matched the one belonging to your bank, exactly what they said and how long they were on the line.

Tell the Ombudsman how your bank responded. Were you left waiting on hold for hours? Was the call handler unsympathetic? 

Campaigners are urging fobbed-off customers to persevere with their claims as there is now a high chance they will win their case

Even if you do not have proof, the Ombudsman can request call transcripts and other internal correspondence. 

Specify what you want as a resolution. This could include a full refund of what was stolen plus compensation for time spent on the phone, writing letters and emails, as well as any distress caused.

You do not need to be a legal expert but you do have to put forward a clear argument. 

In scam cases you must explain that you had no idea you were speaking to a conman and how you had reasonable belief the transaction was genuine. 

It is important not to reflect on the mistakes you may have made. Stop thinking you are to blame.

Avoid attempting to make a legal-based argument, quoting relevant rules, as you risk getting a similar response. 

Describe what happened in your own words and the impact the fraud has had on you.

This post first appeared on Dailymail.co.uk