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Scam victims to be reimbursed under new code: has your bank signed up to protect you?

People tricked into sending their life savings to fraudsters could see their money reimbursed from today onwards, as a new voluntary code comes into effect. But only some banks have signed up so far – so will you be protected?


Approximately £674 every minute is lost to bank transfer scams, new research from Which? has found. In the past year alone, victims lost a total of £354m, with most of it stolen from personal accounts.

Earlier this year, the banking industry introduced a new voluntary code that would offer increased protection from scammers, including reimbursement to blameless victims. The move came two years after Which? launched a super-complaint to push banks and regulators to better protect people who lose money to bank transfer scams.

The new code comes into effect today, but not everyone will benefit.

How the code protects you

In a bank transfer scam, a criminal tricks you into transferring money to their bank account. Often, scammers will pose as your own bank, asking you to move your money to ‘protect it’. Alternatively, they may imitate an organisation you trust, like HMRC, or try to sell you goods or services that don’t exist.

Previously, banks often refused refunds because the customer technically ‘authorised’ the transfer, even where the victims were targeted by sophisticated criminals. In fact, last year, just 23% of the losses were returned.

Under the new code, banks and payment providers will be required to follow a new set of standards to protect customers, including detecting high-risk payments, identifying vulnerable customers, and delaying or freezing payments that might be part of a scam. Both the bank who sent the payment and the one that receives it have a duty to take action.

If you fall victim, and either bank has fallen short of these standards, your own bank will be required to refund your losses. If the banks did nothing wrong, you’ll still be reimbursed from a communal pool – although funding for this is only guaranteed to the end of 2019.

Banks will also bring in a new security system, known as ‘confirmation of payee’, which will warn you if the name you enter doesn’t match the account details.

The deadline for banks to start issuing checks was originally 1 July 2019, but it’s now been pushed back to 31 March 2020 – a delay that’s expected to cost a further £109m in losses.

Which banks have signed up?

The new code is a huge step towards protecting consumers and ensuring victims aren’t out of pocket – but not everyone will benefit. Around 17 brands, covering 85% of all electronic transfers, have signed up so far.

Customers of the following banks can rest assured that they’ll be protected by the new rules:

  • Barclays
  • HSBC
  • First Direct
  • M&S Bank
  • Lloyds Bank 
  • Bank of Scotland
  • Halifax
  • Metro Bank
  • Nationwide
  • Royal Bank of Scotland
  • NatWest
  • Ulster Bank
  • Starling Bank
  • Santander
  • Cahoot
  • Cater Allen

Meanwhile, if you bank with TSB, you can benefit from its new fraud guarantee, where it promises to reimburse any of its customers who are genuine victims of fraud.

How will you be reimbursed if you’re a victim?

The new code comes into effect today (28 May). If you fall victim to a bank transfer scam after this date, you should report it to your bank as soon as possible. If your bank is part of the code, it will confirm whether it will reimburse you within 15 business days, and the reimbursement should come without delay.

Should the bank need more time to investigate, it cannot take more than 35 business days (roughly seven weeks).

If you’re not happy with how the banks involved – either the one from where the money was sent or the bank that received the funds – have dealt with your case, you can complain to the Financial Ombudsman Service.

Even if you were scammed before today, it may still be worth taking your complaint to the FOS, who will judge whether the banks’ met their obligations.

Find out what to do if you’re a victim of bank transfer fraud.

What will I need to do?

While the code creates new requirements for banks, you’ll also need to meet certain standards.

Banks may refuse to refund you if:

  • You ignored warnings about scams when setting up and amending payees, or before making a payment
  • You did not take care to establish that the person you were sending money to was legitimate
  • You were ‘grossly negligent’ – although this is very difficult to define
  • You’re a small business or charity and did not follow internal procedures for making payments
  • You acted dishonestly when you reported the scam

Keep in mind that banks may use a strict interpretation of ‘gross negligence’, so if your claim is refused on these grounds, it may be worth escalating your complaint to the FOS.