Fraud victim reimbursement rankings revealed – how did your bank fare?

People conned by fraudsters face a lottery when trying to get their money back from banks. Some major banks reimburse almost every penny while others pay back just a fraction of losses.

New data from the Payment Systems Regulator (PSR) has ranked the 14 biggest UK banking groups according to how much money they returned to victims in 2022.

It reveals staggering differences in the major banks' reimbursement rates, with TSB returning 91p in every pound stolen from its customers, while Allied Irish Banks (AIB) returned just 10p in every pound.

This stark picture echoes Which? research that repeatedly highlights the banks unfairly denying victims reimbursement.

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What is APP fraud?

It's one of the costliest types of fraud in the UK, with £580m lost in the first half of 2023 according to UK Finance. An authorised push payment (APP) scam, also known as a bank transfer scam, occurs when you send money from your bank account to another account belonging to a scammer.

One typical example of APP fraud is when a scammer calls claiming to be from your bank’s fraud team. They then urge you to move your money to a 'safe' account – but you'll actually be sending money to an account controlled by the fraudster.

In 2019, following a super complaint from Which? to the Payment Systems Regulator, a voluntary code was launched that set out that customers not at fault for their fraud loss should be reimbursed in full. Where banks and customers shared a degree of blame, a partial reimbursement would be made. 

Most – but not all – major banks signed up the the code, but there are clear differences in their interpretation of the rules, as the data demonstrates. TSB, which comes out top for reimbursements, launched its own separate fraud refund guarantee in the same year that promises to refund victims in the vast majority of cases. 

• Read more: Which? scams super complaint

*TSB was unable to separate out reimbursements ordered by the Financial Ombudsman Service (FOS) from its data, causing its reimbursement statistic to be overstated in the chart – but the PSR says this is not likely to have any material effect on its ranking.

• Find out more: regulator risks weakening fraud protections

Which? calls for mandatory reimbursement rules

Rocio Concha, Which? director of policy and advocacy, said: 'These figures confirm what we have long suspected – that some firms would prefer to point the finger at blameless victims than take responsibility for customers losing money at the hands of sophisticated fraudsters. 

'It is good that these figures are now public. Regularly publishing APP fraud reimbursement rates should help to ensure the worst performers raise their game when it comes to both the prevention of APP scams and the treatment of victims afterwards. 

'Having made several positive steps in the fightback against APP fraud, there must be no further delay to the implementation of new mandatory reimbursement rules. The regulator must also abandon its proposals to introduce an unjustifiably high excess, which means a huge number of consumers will not benefit from this mandatory protection.

'Which? led the campaign for scams to be included in the Online Safety Act, which should ensure that tech giants will be held accountable for scams originating on their platforms – potentially facing huge fines if they are failing to meet their obligations to shut out fraudsters.'

What the banks say

Banking industry body UK Finance said: 'The financial services sector invests more in countering fraud than anyone else, and is the only sector that reimburses victims — even though the vast majority of authorised fraud originates on other platforms and networks. Our latest fraud report shows that the majority of authorised push payment (APP) fraud is reimbursed, with over £152m returned to victims in the first half of this year alone.

'What today’s data from the PSR does not show is where fraud starts. Our data shows that 94% of authorised fraud starts online or over the phone, through social media, fake messages and more. But the technology and telecommunications sectors bear no responsibility for reimbursing victims, which means there is little commercial incentive for them to truly tackle the enormous threat that continues to proliferate on their platforms and networks.

'While you can reimburse money, you cannot reimburse the emotional and psychological impact that fraud has on victims. We need these sectors to do more with us to protect consumers by preventing these awful crimes from happening in the first place.'

What the regulator says

Chris Hemsley, managing director of the PSR said of the new data: 'This represents a substantial improvement in transparency. This provides better information for customers on how firms handle APP fraud and encourages these firms to take more action to tackle it.

'Our approach is working because we know there is a greater focus across many more firms on preventing fraud. Our commitment to transparency and the forthcoming mandatory rules are key to strengthening efforts to prevent these frauds from happening in the first place.

'Over the coming months, we will be bringing all payment firms into new reimbursement arrangements to give more consistent protection across the board. This is important because we can see from today’s report that this has not always been the case.'