Third of bank transfer fraud victims ‘now avoid new ways of managing money’

Around one in three (36%) people who have been tricked into transferring cash to fraudsters now tend to avoid new ways of managing their money, according to research for a regulator.

Fraud victims with characteristics which may make them more vulnerable, such as being on a low income of under £20,000 or having a long-term health condition or disability, were particularly likely to have lost confidence in new money management methods, the research found.

People who had lost more than £1,000, or who had not been reimbursed, were also more likely to say they tend to avoid trying new money management approaches since experiencing fraud, according to a survey of more than 1,500 people across the UK in August for the Payment Systems Regulator (PSR).

Just more than half (53%) of people who had fallen victim to authorised push payment (APP) fraud in the past five years said they had been reimbursed to some extent.

Kate Fitzgerald, the PSR’s head of policy, said: “APP fraud isn’t just a financial setback, it affects people’s confidence in payments and can leave them fearful of using digital platforms and retailers in the future.”

She said that with events such as Black Friday next week “it’s crucial for consumers to stay vigilant – but not fearful”.

She added: “Consumers can feel reassured that if they fall victim to APP fraud despite taking the right precautions, they will be able to get their money back.”

Mandatory rules came into force in October, requiring banks to reimburse victims of bank transfer scams.

Under the new protections there is an £85,000 reimbursement limit – but banks can choose to reimburse higher amounts. There is also an optional excess of up to £100 that firms can apply. The excess cannot be applied to vulnerable consumers.

The PSR has also acted to ensure the rollout of anti-fraud tools such as confirmation of payee, which checks that the name of the person that someone thinks they are paying matches the bank account details.

The research also indicated that the impact goes beyond the payments sector, with 41% of victims reporting a loss of trust in social media companies.

Two-thirds (67%) of fraud victims said getting their money back was their top priority.

Other key priorities include removing fraudulent content (19%) and investigating the fraud (7%).