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Which? scam warning as £350m lost in bank transfer scams

MORE than £350m has already been lost to bank transfer scams in 2021.

Losses increased by 71 per cent in the first half the year, exceeding the amount of money stolen through card fraud for the first time according to UK Finance figures.

As well as more being stolen, less money is being repaid to victims.

Of the £355.3m lost to bank transfer scams in the first half of the year, just £121.7m was reimbursed to victims.

A statement from consumer advice organisation Which? said: “This is despite many banks being signed up to a voluntary code pledging to reimburse victims unless they’re at fault.

“UK Finance says fraud is ‘now at a level where it poses a national security threat’, and is calling on the government for coordinated action, and to ensure all economic crime is brought within the scope of the Online Safety Bill.”

The 2020 figure of £479m lost to bank transfer fraud is set to double by the end of this year if money continues to be lost at the same rate over the second half of the year.

This is the advice from Which? on how to avoid falling victim.

What is bank transfer fraud?

Bank transfer fraud is also known as authorised push payment (APP) fraud. It usually involves scammers lying about who they are in a bid to trick victims into transferring money to them.

There were 106,164 cases of APP fraud in the first six months of 2021, the majority on personal accounts. However, APP fraud can come in a range of guises and they’re all increasing.

Impersonation scams

Almost £108m was lost to investment scams, which can involve ads on social media for bogus investment products offering high returns to encourage people to part with their cash.

Romance scams

There was also a 62 per cent rise in the amount lost to romance scams, which topped £15m. Fraudsters target people looking for love, often via online dating, befriending them before asking them for money.

Purchase scams

Finally, purchase scams were found to be the most common form of APP fraud. This is when the victim pays in advance for goods and services that are never received.

They usually involve the use of an online platform, such as an auction website or social media advertising the sale of a popular product at a low price.

What fraud protection do you have?

Many banks signed up to a voluntary code which means they must take steps to protect customers from fraud and reimburse those who do, but aren’t to blame.

Banks are required to:

  • Educate customers about APP scams – including what to watch out for and how to protect themselves against fraudsters.
  • Identify high-risk payments and vulnerable customers.
  • Provide effective warnings when an APP scam risk is identified, including giving customers warning messages when they make payments or add new payees.
  • Talk to customers about payments, and in some cases delay or stop payments when scam concerns arise.
  • Act quickly when scams are reported.
  • Take steps to stop fraudsters from being able to open fake bank accounts.

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