New rules that came into force on 31 January should help victims of fraud recover their money. Up until now, if a thief defrauded you of cash from your bank account, you could only complain to your own bank. Normally, all the bank would do is to say the fraud was due to your gross negligence and refuse to compensate you.
However, every fraud requires another bank – the one where the crooks have their account – to receive the proceeds of crime. Until last month, victims could not make a complaint about the “receiving” bank because they had no relationship with it. But under the new rules they can complain to the receiving bank as well.
Both banks must now show they have done enough to prevent, or respond to, the fraud. If they have not, then either can be held liable and the victim should be refunded.
The receiving bank in particular must be able to explain how the thieves were allowed to open or take control of the account used to launder the money. The new rules apply to a fraud that is known by the technical name of Authorised Push Payment or APP fraud.
That is, a transfer of funds by a victim to a fraudster where the victim is tricked into making the transfer. Such crimes are growing dramatically – £145 million was stolen from 34,000 victims in the first half of 2018, which is a rise of 76 per cent on the year before.
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There are signs that the banks are improving their systems and the Ombudsman is getting tougher. So if you or someone you know has been defrauded, complain to your own bank and to the bank the money was transferred to – your bank must now tell you where that was.
If that’s not successful then go to the Financial Ombudsman. You will find more information on this subject online at financial-ombudsman.org.uk.