They would be more proactive if they were forced to pay back lost funds #nigeria | #nigeriascams | #lovescams

Seriously – what is the point of the authorised push payment (APP) scam code? This voluntary scheme was launched in May 2019 to encourage banks to treat the victims of APP fraud more fairly and consistently.

Nearly every major bank is signed up to the code which means they must refund customers who have been tricked into transferring money or giving banking details to a wolf in sheep’s clothing. The code also requires signatories to delay or block suspicious payments to prevent fraud in the first place.

But it’s become clear that the code is a toothless joke, with just 47 per cent of APP fraud victims being reimbursed by their bank last year.

Weaselly arguments are routinely deployed to deny refunds, including the claim that victims are somehow deliberately “ignoring” warnings about common scams posted on banks’ websites. This denial of crime compounds victims’ trauma and leaves them feeling not just helpless but hopeless.

Banks aren’t exactly on the front foot when it comes to spotting fraudulent transactions either. There were almost 200,000 reported cases of APP fraud in 2021 and the true figure must be higher, given the reluctance of many fraud victims to come forward.

Would banks be more proactive in detecting and stopping large payments to unknown beneficiaries if they knew they would be on the hook for lost money? I think we know the answer.

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The APP code was only ever meant to be a stopgap as the Government and regulator worked out a better solution. That should come in the form of the Financial Services and Markets (FSM) Bill, which among other things will legally compel banks to refund all victims of fraud, regardless of the circumstances.

The Government has been racing to publish the Bill before Parliament’s summer recess on Thursday 21 July – if it doesn’t quite manage it, I can’t think why.

Even if the Bill does stay on track, it won’t take effect for at least another year. Plenty more time, then, for the banks to engage in tacky victim-blaming rather than invest properly in their anti-fraud resources and get a grip on the problem.

Don’t get me wrong, the banks can’t fight fraud alone. It’s not good enough to just keep writing blank cheques for fraudsters, knowing that ultimately the banks (and all of us) will pick up the bill.

We financial journalists are sick and tired of highlighting the effective decriminalisation of fraud in this country, and nothing being done about it. Home secretary Priti Patel is reportedly “demanding” a new fraud strategy by the autumn to ensure such crimes are taken more seriously by the police and crown prosecution service.

The disgracefully ineffectual Action Fraud looks set for the chop but who knows what will come in its place? I haven’t heard any of the Conservative leadership candidates outline their fraud strategy, though I’m open to the possibility that one of them has a brilliant plan that will become clear in due course. Let’s wait and see.

Social media companies must be held accountable for the fraud flourishing on their platforms if fighting it isn’t going to feel like Hercules lopping off one of Hydra’s heads, only to see 10,000 more pop up. Companies like British Airways and TalkTalk should also pay their share of the compensation bill when they allow their customers’ personal details to be hacked into.

On the positive side, there is one bank that has redeemed itself for its ground-breaking approach to fraud, and that is TSB. I used to be a customer but left after the IT migration failure in 2018 that locked me out of my account for days.

Since then, TSB has turned things around by committing to refunding all victims of fraud, therefore coaxing more of them to come forward and provide honest information about the crimes committed against them. The result is that TSB can provide more detailed evidence to help police investigate fraud, which increases the chances of prosecution. It can also effectively publicise and detect the latest scams currently doing the rounds.

Compare the way TSB invited iMoney’s Grace Gausden into its fraud centre earlier this year to share the work it’s doing with the shady, evasive approach of its competitors, who refuse to disclose how many victims they refund to avoid public outrage.

The Financial Services and Markets Bill, when it’s finally enacted, should be a rude awakening for the banks. It will demonstrate that we won’t stand for this mass violation of our financial security. We’ve had enough of criminals being given free rein to bombard us and the people we love with sophisticated scams. And we can no longer tolerate innocent, often vulnerable victims being put on trial by their banks, as if they’re the criminals.

By refusing to gaslight victims of fraud, TSB has shown a more compassionate and enlightened fraud strategy is possible. What a travesty that banks will be forced by law to do something they should have volunteered for a long time ago.