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Banking scams

Published Tuesday, April 9, 2019

This briefing answers frequently asked questions about banking scams, and describes: the scale of the problem; the types of scam; what help is available for victims; and, government and industry action.

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Criminals successfully stole £1.2 billion through banking fraud and scams in 2018.[1] Most of this was through unauthorised payments from payment cards, remote banking and cheques. Victims of this type of fraud can often get the money back from their bank, depending on the circumstances of the loss.

However, a significant amount of fraud in 2018 was also via authorised payments. This is when the victim is tricked into transferring the money to the criminal.

In these cases, victims were much less likely to recover their losses. In 2018, only 23.3% of losses from authorised payments (£82.6m) was returned to victims. This was either by a full or partial refund directly from the bank or when the funds were recovered from the recipient bank.

A code of practice will make it easier for victims of this type of fraud to be reimbursed by their bank from May 2019. A long-term funding mechanism for delivering this has yet to be determined.[2]

The Action Fraud website:

  • allows victims to report fraud to the police;
  • describes what victims need to do should they become a victim of this crime;
  • describes the different types of fraud;
  • gives practical advice to individuals and businesses on how to protect themselves.

The ‘Take Five’ website, which is a national awareness campaign led by industry and Government, sets out additional advice here.

The banking industry has a broad regulatory requirement to provide a safe banking environment.

If a bank or service provider refuses to reimburse a victim of a bank scam, the Financial Ombudsman Service can investigate whether the bank took the appropriate decision.  

 

[1]FRAUD THE FACTS 2019: The definitive overview of payment industry fraud”, UK Finance [online], 21 March 2019 [accessed 8 April 2019]

[2]APP Scams Steering Group Agrees Voluntary Code”, APP SCAMS STEERING GROUP, 28 February 2019 [accessed 8 April 2019]

Commons Briefing papers CBP-8545

Author: Oliver Bennett

Topics: Consumers, Financial services, Internet and cybercrime

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