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UK Fraud Complaints Surge Over 40%

UK consumers’ complaints over banking fraud have surged by over 40% to hit an all-time high in the 2018-19 financial year, driven by online scams, according to official figures.

The Financial Ombudsman Service (FOS), which settles disputes between customers and their banks, said it received 12,195 complaints over the period, a 43% increase on the 6952 in the previous 12 months.

“One of the fastest-growing types of fraud is authorized push payment (APP) fraud — where people unwittingly act on fraudsters’ instructions and carry out the transactions themselves,” the FOS said.

“We’ve been taking a close look at the APP complaints we’ve received. And we’ve reminded banks of their existing obligations to ensure that victims of fraud are treated fairly, as we’ve found that they haven’t always got this right.”

A new voluntary code of practice will come into force at the end of May designed to help victims of APP fraud get their money back more easily. Up until now, banks have been reluctant to pay out in such cases and often blame the individual.

Some £354m was lost to APP fraud in the UK last year, up 50% from 2017. Although some lenders, like TSB, have sought to differentiate by promising to refund victims, the industry in general has been slow to react to the threat.

“Bank transfer fraud is spiraling out of control, with people losing life-changing sums every day and then facing a grueling battle to get their money back from the very banks that should be preventing them from falling victim in the first place,” argued Gareth Shaw, head of money at consumer rights group Which.

“Banks have just two weeks to sign up to the new industry code [of practice], which will only be deemed a success if they finally halt this worsening crime by offering better protection to their customers, while swiftly and fairly reimbursing all those who lose money through no fault of their own.’

Another new proposal comes from the Payment Systems Regulator (PSR) and will introduce “confirmation of payee checks” to warn users when the name they enter into online bank transfers doesn’t match the sort code and account number on record.

However, a July 1, 2019 deadline is now set to be pushed back to 2020.

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