Consumer complaints organization Which? has highlighted that banks are treating victims of authorized fraud unfairly, with many institutions incorrectly deciding on scam cases and reimbursement in nearly 90% of instances.
According to data from Which?, up to three-quarters of cases related to Authorised Push Payment (APP) fraud that were escalated to the Banking Ombudsman have resulted in a favorable outcome for the customer, despite initial rejections by the banks for reimbursement.
The findings reveal that NatWest and The Royal Bank of Scotland (RBS), which are part of the same banking group, are reportedly mismanaging 86% of cases, while Santander and Bank of Scotland follow closely at 82% and 81%, respectively. Although challenger bank Starling also had a significant complaint upheld rate at 80%, this was based on a considerably smaller number of closed cases compared to other banks.
Complaints against Lloyds Bank (78%), Revolut (77%), and Nationwide (74%) have similarly found favor for the victims in these cases.
Which? is urging for enhanced transparency regarding banks’ practices and their reimbursement strategies. This would necessitate the Payment Systems Regulator (PSR) requiring banks to regularly publish data on their reimbursement rates for all APP fraud cases they handle annually. Additionally, Which? advocates for the Government to implement mandatory APP fraud reimbursement obligations across all firms utilizing Faster Payments, along with a rigorous framework for regulatory oversight and enforcement.
Jenny Ross, Money Editor for Which?, stated: “It’s shocking that so many banks are failing to handle cases correctly, often wrongly and unfairly denying victims reimbursement. It’s clear that banks cannot be trusted to make the right decision regarding reimbursement for customers who have fallen victim to APP scams.”