By Victoria Bischoff, Money Mail Editor
For years, impeccable fraud victims routinely received no refunds.
Then in 2019, after a campaign by this newspaper, they were given a life preserver.
Major banks agreed to sign a voluntary code of conduct requiring companies to reimburse customers who have fallen victim to sophisticated scammers.
But this was always meant to be a temporary solution while plans for proper regulation were swept away.
But three years later we are still waiting. Only half of the victims who were tricked into transferring money to scammers were reimbursed by banks last year.
Meanwhile, the Financial Ombudsman, who handles disputes between financial firms and customers, has seen a rise in fraud complaints.
Significantly, last year it was in the consumer’s favor in about three quarters of these cases. All too often, banks are still trying to wrestle themselves from doing the right thing.
At Money Mail, we hear from dozens of readers who have been caught in the exact same scam, but treated completely differently by their banks. One can get a refund, the other a partial refund, while the other is refused altogether.
The problem is that there is a major loophole that allows banks to refuse refunds if victims have not taken reasonable steps to protect themselves.
And without clear guidance, companies can interpret this clause however they want. For example, many try to blame the victims by claiming that they ignored a warning on their website.
This is despite experts repeatedly warning that many of these scam alerts are vague and ineffective. And because banks aren’t required to disclose their individual refund rates, they can hide behind industry averages.
Of course, other organizations — not least tech giants who routinely allow fraudsters to advertise online — must also be held accountable.
But banks are on the front lines in the fight against fraud. They are responsible for protecting our money, but allow too many suspicious payments to pass unchallenged.
So it’s brilliant news that the Treasury has finally committed to enact laws that will eliminate current inconsistencies and force banks to reimburse all victims.
The only problem is that it will take at least a year before this mandatory regulation comes into effect.
As banks revealed this week that a record £1.3bn was lost to scammers last year, victims can’t afford to wait an extra day.