Kristen Zanoni  |  August 24, 2020

Category: Legal News

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Woman holding credit card uses a laptop to transfer money - scam victims

Scam victims of authorised push payment (APP) fraud are encountering a “lottery” over being given their money back after being scammed.

The fraud victims are being treated unfairly and are subject to an inconsistent lottery when trying to recover stolen money lost in bank scams, The Guardian reported. Many scam victims have had to pay thousands out of pocket. 

In 2019, a voluntary industry reimbursement scheme was set up to make it less complicated for scam victims to receive their money back after being targeted by bank scams.

Scam victims who are fooled into transferring money to cons can get a refund if neither the victim nor the bank is at fault.

Before the voluntary industry reimbursement scheme was created, scam victims lost their money with no chance of getting it back. Banks were not bound to give the money back to the victim because the customer allowed the bank scam transfer.

The bank scam reimbursement scheme is reportedly problem-laden though, and the scheme should be obligated to be fair across the board, Which? says

Some people are being denied bank scam reimbursement even though the scheme is meant to cover them.

Reportedly, some banks are scarcely interpreting the scheme, meaning they are commonly blaming customers for being victims of bank scams and not realising the warning signs, according to Yahoo! Finance. Allegedly, banks are blaming scam victims of not being aware and using this as a reason to decline reimbursement. 

In many cases, scams are complex and sophisticated, with con artists who act as genuine organisations such as banks and businesses. These scammers can sometimes easily manipulate vulnerable people to transfer money to them.

According to Which?, only 41% of reimbursements are actually going back to scam victims.

Which? is demanding a code for scam victims to be mandated by law. As of now, Which? reports, the number of scam victims being refunded by banks is sorely deficient. 

Arm with black glove reaches through laptop screen for wallet lying on table - scam victimsBank scams in the U.K. have escalated in recent years, especially with authorised push payment scams, according to The Guardian.

In APP scams, hackers infiltrate email accounts and defraud people into transferring money to criminals’ bank accounts.

Many scam victims have lost massive sums of money, some into the hundreds of thousands of pounds.

Getting the money back has been somewhat of a toss-up, though.

Some scam victims get their money back, while some struggle to get a refund. According to Which?, there needs to be more consistency for bank scam refunds. 

“The lack of fairness, consistency or transparency across the industry means that the chances of people getting their money back is often a total lottery,” Gareth Shaw, head of money at Which?, said. “A voluntary approach to tackling bank transfer fraud has failed. Banks, regulators and government must work together to make the code mandatory and ensure that strong standards on reimbursement are introduced.”

Which? dove into the inconsistencies of the treatment of scam victims and found that half of the firms (four out of eight) gave victims a full refund of their money in 6% or fewer of scam cases. One of the firms refunded only 1% of scam victims.

Across the board, there are inconsistencies in how much firms are reimbursing.

One firm refunded 6% of a victim’s scammed money, while another firm refunded 63% of the value of victims’ stolen money.

In some cases, victims who were not helped by banks and told they would not be receiving a refund, Which? has interceded and the decisions have been reversed. 

Which? is calling for improvements in the bank scams code, asking for the code to require banks to reimburse scam victims. 

According to Which?, if you have been a scam victim, you can fill out a formal claim for reimbursement.

Do you think the reimbursement scheme is fair or do you think it needs to be amended for consistency? Let us know in the comments.

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