JEFF PRESTRIDGE: MPs must ramp up pressure to help victims of scams

JEFF PRESTRIDGE: MPs must grill bank bosses over why they are refusing to help many customers who have lost life-changing sums of money to scams

I trust members of the Treasury Select Committee will be at their inquisitive best tomorrow when they quiz regulators over what they are doing to ensure scam victims are treated fairly by their banks. 

Up before the committee will be Chris Hemsley, managing director of the Payment Services Regulator, and Mark Steward, director of enforcement at the Financial Conduct Authority. Between them, these two regulators are responsible for policing the banking industry’s approach to scam victims. 

All the evidence we have gathered suggests that banks are currently being let off the hook. They are routinely refusing requests from scam victims for their losses to be made good, even when all the evidence suggests that customers were not to blame. 

As consumer group Which? says: ‘Victim blaming is endemic.’ The statistics back this. Despite the launch two years ago of a voluntary code to protect customers tricked by scammers into transferring money to them, a majority of victims are still left to bear the losses. Only 46 per cent of losses are reimbursed, resulting in £700,000 a day being lost by bank customers to transfer scams. 

Scrutiny: Why is the code governing how banks treat scam victims voluntary, thereby enabling some banks to refuse to sign up to it?

Although I imagine the MPs that sit on the committee will be well briefed, it’s essential they get answers to a number of key questions. Why is the overall reimbursement rate so low? Why are a majority of disputed cases that end up at the Financial Ombudsman Service found in favour of bank customers – indicating that banks are far too eager to reject claims for scam losses to be refunded? 

Why is the code governing how banks treat scam victims voluntary, thereby enabling some banks to refuse to sign up to it? 

Is enough being done to ensure banks are giving customers sufficient information about how to spot a potential scam? And, most importantly, why isn’t the Payment Services Regulator stepping up to the plate and requiring banks to release details of their individual reimbursement rates? Currently, such data is published anonymously, enabling banks with low reimbursement rates (in the teens) to avoid the adverse publicity they deserve. 

On Friday, Gareth Shaw, Which?’s head of money, said: ‘The Treasury Select Committee must hold the feet of the regulators to the fire over the unacceptably slow progress towards getting bank customers the protection they deserve. It must act as a stepping stone towards urgently needed change and an end to the culture of victim-blaming.’ 

Shaw is spot on. The committee should also use tomorrow’s session to announce its intention to grill the bosses of the major banks over why they are refusing to help so many customers who have lost life-changing sums of money to scammers.

Many thanks 

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