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Which? calls for banks to reimburse victims of computer takeover scams

Campaigning group Which? is calling on banks to refund victims of computer takeover scams, with new figures from Action Fraud showing £16 million was defrauded from consumers using this technique last year.

4 comments

Which? calls for banks to reimburse victims of computer takeover scams

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The consumer champion says it has heard from people who have lost thousands of pounds to this convincing scam where the perpetrators phone up pretending to be tech support from a reputable firm such as Microsoft or BT.

The fraudsters then attempt to persuade victims to install remote access software - which is used by many legitimate IT workers - that allows them to steal money and personal details.

In the last twelve months, Action Fraud says that it has received 14,893 computer software service fraud reports, with reported losses reaching around £16.5 million over that period.

Which? is demanding that banks refund more customers who fall victim, having heard of a number of cases where people have been denied reimbursement due to banks claiming that they either authorised the payments or had been grossly negligent.

Which? is calling on the government to legislate to enable the current voluntary code on bank transfer scams to be replaced with a new statutory code of practice. This should include clear standards for all payment providers involved in transferring money between accounts.

Jenny Ross, Which? Money Editor, says: “Millions of pounds are lost to computer takeover scams every year, with potentially devastating consequences for victims who lose life-changing sums of money to these callous fraudsters.

“Which? is calling on banks to reimburse all blameless customers who fall victim to these scams and for the government to introduce legislation to ensure a new statutory code of practice can be created, which would include clear standards and protections for victims."

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Comments: (4)

A Finextra member 

I don't mean to sound heartless and really feel for those that have been impacted by these scams, however at what point does responsibility for their own actions become the responsibility of the banks? 

All consumers need to be mindful of exactly who they're talking to and take the appropriate precautions before divulging their bank/payment details and while I'm not a great supporter of the banks, I'm struggling to see how they can prevent these scams, other than potentially highlighting it being potential fraud and warning their customers accordingly.

in my view, what's really needed is proper KYC checks between banks so that the fraudster can't disappear with the cash - perhaps by ensuring that high value transfers between personal accounts (assuming the fraudulent accounts are personal) to any new account are subjected to an x days delay (existing accounts can be excluded) before funds can be moved out of the account that received the payment?

José Manuel Álvarez Consultant at Irisel Consulting

Banks need to continue educating their customers but I cannot agree more with the statement: "at what point does responsibility for their own actions become the responsibility of the banks?".

And moreover, this cost would be socialized among the rest of the customers. And why should other customers pay for this? If electronic banking is not for you, there are still banks with physical, personalized care. It's one's option, what you pay is what you get.

Secondly, how to tell a victim from a fraudster? If the victim is refunded, there is a perverse incentive for a new fraud scheme, where the supposed victim is taking part on the fraud itself. As a minimum, it reduces the incentives for fighting the fraud on the consumers.

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

Total BS posturing by Which? Will it next call for banks to reimburse victims of pick-pocketing?

A Finextra member 

@Ketharaman - Please don't put ideas into their heads!

:-)

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