TSB is the bank that likes to say ‘no’ to fraud. But since it cannot guarantee to stop the crooks, it has pledged that customers who fall victim will at least not have to foot the bill.
‘We will refund the money they lost from their account,’ it declares in its multi-million pound advertising campaign promoting its new fraud guarantee refund.
The bank is the first to take such a bold stance. Sceptics believe it is a public relations stunt to help draw a veil over an IT crash last year that left millions of customer accounts at risk of fraud.
Cash safety: TSB said it will foot the bill if customers fall victim to fraud
But others are more encouraged – with caveats. Andrew Hagger, of financial consultancy Moneycomms, says: ‘It’s a positive move and a brave one as I’m sure there will be criminal gangs looking for ways to try to exploit this fraud promise. So TSB will need to be on its mettle to ensure fraudsters aren’t colluding with customers.’
Martyn James, of complaints service Resolver, says: ‘TSB is doing a brave thing. But most customers we speak to also want the fraudsters to be brought to justice. TSB has said it is investing more in anti-fraud measures. It is time to put pressure on the other banks to do the same.’
But what are TSB’s rivals prepared to do? Most intend to or have already signed up to a voluntary code – which goes live from the end of next month – to help get refunds more easily and quickly for customers who are unwittingly taken in by authorised ‘push payment’ scams.
These scams involve a fraudster tricking a victim into authorising the transfer of money directly to their account. The money often ends up abroad, where it is almost impossible to trace.
Victims can struggle to be reimbursed because they have ‘authorised’ the transfer. Banks are required to return funds only if the customer did not approve the transaction. But the new code should bring relief to more victims who innocently fall for sophisticated tactics – though if they show negligence or ignore warnings, their claims will be rejected.
Authorised bank transfer tricks cost 84,000 victims a total of £354million last year. Common methods for duping victims include tricking homebuyers into sending deposits to fabricated solicitor bank accounts, getting holidaymakers to pay for rentals on holiday villas that do not exist and using fake telecoms engineers to take over online bank accounts by pretending there is a fault with a customer’s broadband.
One of the first customers to be protected by the TSB guarantee is Richard Sailing from Wrexham, North Wales, who was defrauded of £11,000 via a push payment scam two weeks ago.
He was called by a man claiming to be from BT. Richard (his name has been changed to protect his identity) says: ‘The caller told me an error had been made when installing new routers and they wanted to put this right and at the same time refund me £350.’
The caller asked him to log on to his laptop and download new software for the routers. As a long-standing BT customer, Richard had no reason to doubt the caller’s motives. After giving him access to his laptop, Richard, 67, was then told to log on to his online bank account so he could receive the £350 compensation.
The computer screen went blank a number of times – which it transpired was the scammer secretly carrying out activity on his account online. The caller also transferred an incorrect amount – £5,350 – so that Richard would have to refund him, making it appear that the receiving bank account was genuine when later £11,000 in fraudulent transfers were made.
After a phone call from his bank, Richard visited his local branch the next day to discuss what the manager thought were suspicious transfers. Richard realised then he had been scammed. He says: ‘I was shell shocked.’ But he was refunded in full within a week – and given advice on how to stay safe in future.
Total banking fraud losses topped £1.2billion last year
He says: ‘I don’t feel stupid because these people were so convincing. But I am now more careful about answering the phone and ignore numbers I don’t recognise. I plan to do future banking transactions at my branch.’
But such scams are just the tip of the iceberg. Total banking fraud losses topped £1.2billion last year, so there is more work to be done.
Though TSB is the only bank offering a fraud refund guarantee – no matter what kind of fraud you fall victim to – The Mail on Sunday asked other banks what additional safeguards they were applying.
Having cut through the jargon and corporate-speak, it does not make for hugely reassuring reading. Most banks simply pointed to their support of the new push payment code, while others spoke of investigating each claim on its own merits – suggesting that there will be no automatic or easy resolution for victims. Their responses are summarised in the panel above.
Several highlighted how customers need to take more action to protect themselves and as such support the likes of the Take Five industry campaign, which encourages individuals to think before accepting instructions about their finances out of the blue. Their message appears to be that the onus of responsibility remains with the customer.
Have you been a victim of bank fraud, and how did your bank respond? Email firstname.lastname@example.org
Empty promises? What banks told the MoS
Metro Bank says that all scam claims are based on ‘the merits of each individual case’. It speaks of safeguards that it applies – but these are left unspecified – and declares that these are constantly reviewed and updated as fraudsters develop new tactics.
The bank runs a ‘Be Your Own Hero’ campaign to help educate customers on how to protect themselves from fraud. Metro also says that it backs the ‘banking protocol’ – a national rapid response scheme through which staff in bank branches can alert police and Trading Standards to suspected frauds while they are taking place.
Metro applies safeguards, but they are left unspecified
Barclays Bank provides limited information, saying it is pleased to have played an ‘important role in the creation of the push payment code’.
A spokesperson says: ‘As always, we will investigate and assess any instances of scams on a case-by-case basis.’
HSBC says that other than being ‘pleased to be amongst the first banks to sign on to the new authorised push payment voluntary code’, it is making ‘significant investments in technologies, processes and people to protect customers from financial crime’.
Santander bank has 700 employees devoted to tackling fraud and runs a 24-hour hotline. It says it spends millions of pounds a year on fraud prevention, both on services used by customers such as cash machines and online banking, and on behind-the-scenes monitoring and detection.
The bank says: ‘Over the last few months we were the first bank to introduce specific warnings to online payment and mobile app services to provide tailored scam advice based on the type of payment being made.’ The bank has also run several high-profile fraud awareness campaigns, including a Scam Avoidance School which saw more than 1,000 lessons delivered to more than 20,000 people in 2018.
Natwest RBS, the giant banking group that is 60 per cent State-owned, should be leading the way on anti-fraud initiatives, but it has little to say on the matter. It simply says that it already looks at each fraud claim on a case-by-case basis and will reimburse customers where they have been the victim of a sophisticated scam.
Nationwide Building Society promises customers using its digital service that it will ‘refund any money taken from your account without your authorisation’ and ‘monitor and protect your account with the latest technology’.
In addition, it checks for suspicious or unusual transactions, trains employees, supports education campaigns and holds events at its branches that explore the issue.
It also uses ‘new technologies’ and provides customers with advice on staying safe along with information on the latest fraud and scam trends.
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