Bank transfer scams cost £236m and most could not be recovered

Individuals and businesses were tricked out of transferring a total of £236m to fraudsters last year, according to industry figures.

The report from UK Finance found that 74% of the money was unable to be returned to victims.

Unlike fraud involving other types of payment method such as credit or debit cards, those caught up in scams where they agree to make transfers have no legal right to be reimbursed by their banks.

Consumer group Which? has been calling for financial providers to shoulder more of the burden in these cases.

The new figures showed that there were 43,875 cases of authorised push payment (APP) scams reported in 2017, with a total cost of £236m.

It was the first time such data has been compiled by UK Finance.

The figures showed that 88% of the total related to retail consumers, who lost an average of £2,784, while the remainder of victims were businesses, losing £24,355 on average per case.

Banks and building societies were able to recover £60.8m of the scam losses.

Which? launched a "super complaint" in 2016 calling on the industry to do more.

The Payments System Regulator (PSR) responded by urging banks to work together to crack down on scammers but stopped short of making them liable for the losses.

Last November the PSR said it was aiming to agree a reimbursement policy with the sector by September.

Responding to the latest figures, Which? money expert Gareth Shaw said the new system "must be swiftly introduced by banks to properly compensate customers who have been left out of pocket".

He added: "These figures show the alarming scale of push payment scams, with people still losing life-changing sums of money to this type of crime."

Katy Worobec, managing director of economic crime at UK Finance, said the industry was "committed to playing its part" in combating the fraudsters.

She (Munich: SOQ.MU - news) said financial providers had invested in new security systems, introduced new standards on how they respond to victims, and was working with the Government's Joint Fraud Taskforce to stop scams and better recover stolen funds.

The authorised payment fraud figures were released alongside data showing unauthorised fraud on payment cards, remote banking and cheques totalled £732m in 2017, 5% down on the year before.