Banks may be forced to reopen scam victims’ claims as watchdog finds rules being ignored

Innocent victims of bank transfer scams who have been told they will not get their money back may still be in line for compensation after a watchdog found banks’ refund processes were flawed.

People who lost cash to “authorised push payment” fraud are still being refused refunds, despite new rules stating they should get their money back if they are not at fault, because some banks are not taking important evidence into account, a report found. 

In some cases banks are sending victims a text message to say they will not get their money back and offering no explanation why. A number of firms are also not keeping records of how they reached their decision, giving customers no chance of challenging it.  

Gareth Shaw of consumer group Which? said the rules on refunds were not being applied fairly or consistently, causing people to lose life-changing sums. People who have been refused a refund may now be thrown a lifeline, as banks have been told to go back and review cases where the customer may not have been treated fairly. 

More than 120,000 people were tricked into transferring money to scammers last year, losing £3,800 each on average, according to figures from UK Finance, the banking trade body.

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