Lloyds Bank, Monzo and Starling are refunding less than half the money lost to scams, according to a shocking new ranking that names and shames banks that leave customers out of business.
For the first time, banks have been ranked according to the rate at which they refund scam victims.
The report, published yesterday by the Payment Systems Regulator (PSR), reveals a dramatic gulf between banks’ willingness to refund.
Rankings: For the first time, banks have been ranked based on the rate at which they refund scam victims.
Of Britain’s 14 largest banks, Monzo customers are most likely to be victims of fraud, but least likely to receive a full refund. The online bank pays the full amount to only 6 percent of victims.
Banks have so far refused to reveal what proportion of customers receive a full refund. There is currently no consistent industry-wide standard, as banks are not required to pay for losses caused by scams.
Because each bank has its own rules, Money Mail often hears from victims whose refunds were refunded by one bank but not another. The new PSR report reveals the magnitude of the inconsistencies.
TSB customers are more likely to get their money back when they have been scammed: 94 percent of those who reported a scam in 2022 will receive a full refund and 4 percent will receive a partial refund. Overall, 91 percent of all money lost to scams is refunded.
Nationwide, HSBC and Barclays refund between 70 and 78 per cent of money lost, with Nationwide paying a full refund to 91 per cent of customers. However, reimbursement rates fall beyond this.
Respectively, Santander and NatWest pay only 63 per cent and 62 per cent of all the money swindled.
The worst of Britain’s five largest banks is Lloyds, which refuses to refund more than half (51 per cent) of the money lost.
Allied Irish Banks, which has more than 3.2 million customers, is the worst offender of all, returning a refund in just 12 per cent of cases and refunding 10 per cent of all money lost.
Sophisticated: Many banks refuse to pay if customers have ignored warnings online or read them over the phone, but scammers have become adept at avoiding such warnings.
They are followed by Danske Bank and Monzo, which offer full refunds to only 7 percent and 6 percent of scammed customers and partial refunds to 10 percent and 8 percent.
The PSR finds that 141 of every million Monzo transactions in 2022 were sent to fraudsters, the highest rate of all the largest banks.
Rocío Concha, from consumer campaign group Which?, says: “These figures confirm what we have long suspected: that some companies would rather point the finger at innocent victims than take responsibility for customers losing money at the hands of sophisticated fraudsters.
‘Monzo “point blank” denied me a refund’
Monzo customer Rebecca Hyde, 51, from Bath, was the victim of a “push payment” scam that left just £4 in her bank account in April.
She says Monzo “rocky” refused a refund when she reported the scam and closed her account, without compensation.
Only when Rebecca took her complaint to the Financial Ombudsman Service did she get a full refund, as the financial arbitrator ruled that her bank had unfairly denied her compensation.
Rebecca, a self-employed cleaner, says she received a call in April from a man called James who said he worked at Monzo and was calling to report suspicious activity on his account.
She says she didn’t give him personal details but followed his instructions to send a notification to her phone and then turn it off. In that time, she charged £2,193 to a Co-op store in London. “I had to fight because Monzo said he had let me down,” she says.
Many banks refuse to pay if customers ignore online warnings or read them over the phone. But scammers have become experts at avoiding such warnings.
Banks will soon have to refund
Paul Davis, head of fraud prevention at TSB, says it is time for customers to look at the level of fraud refunds provided by their bank, which TSB has been publishing for four years.
Starting next year, under new rules, banks will have to refund all victims of “authorized push payments” scams within a week of reporting the incident.
They typically occur when a victim is tricked into transferring money to a scammer posing as an organization such as a bank, family member, or friend.
Both Lloyds and Monzo say they have invested heavily in prevention systems.
Ashley Hart, head of fraud and disputes at Monzo, says: ‘Being a victim of fraud is extremely distressing. “Our goal is to prevent this from happening in the first place.”
Liz Ziegler, head of fraud prevention at Lloyds Banking Group, says: “Protecting our customers from fraud is our priority and more than 80 per cent of our customers receive a refund, including two-thirds of victims who receive a full refund. “.
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