Fraud has lasting impact on victims’ mental health, warns Which?

Fraud is having a lingering impact on some victims’ mental health, research for Which? has found.

The consumer group commissioned a survey of more than 1,000 people across the UK who had lost money to fraud in the previous two years.

Of those who reported the fraud, just over half (55%) were able to get all their money back – but nearly a quarter (22%) said they received no reimbursement at all.

People were also more likely to say their experience of fraud had a negative impact on their levels of stress (71%) and mental health (60%) than on their financial situation (50%).

The research also indicated that victims who had been professionally diagnosed with mental ill health at the time of the fraud were less likely to get all their money back than those with no diagnosis (45% versus 60%).

Those with existing mental health issues who did not tell their bank about the fraud were also more likely to say this was because they had previously had a bad experience doing so, compared to those with no diagnosis (11% versus 5%).

The findings were released ahead of new fraud reimbursement rules coming into force next month.

From October 7, the mandatory rules will require banks to reimburse customers who are victims of bank transfer scams unless the customer has been grossly negligent.

A previous maximum reimbursement value had been set at £415,000 under the plans.

But last week, the Payment Systems Regulator (PSR) announced a consultation into a new lower cap, set at £85,000.

Which? is urging the regulator to stick to the previously-proposed £415,000 limit.

Rocio Concha, Which? director of policy and advocacy, said: “Our research lays bare the long-lasting emotional impact fraud can have for victims and shows why mandatory reimbursement rules are desperately needed to help ease the unfair emotional and financial burden on those who fall victim to increasingly sophisticated scams.”

In April, Focaldata surveyed more than 1,000 people who had lost money to fraud.

Jim Winters, head of financial crime at Nationwide Building Society, said: “Fraud is fraud, no matter how big or small, and it can have devastating effects.

“That is why we encourage victims to come forward, tell their story, report crime and go through the refund process, regardless of the amount lost.

“As Which? highlights, the damage fraud can have goes beyond financial harm. This is why we want to see an increased focus on prevention and a joined up industry approach to tackle this growing challenge head on.”

A spokesperson for the PSR said: “We recognise that fraud can have a devastating impact on people, which is why we have taken action to make reimbursement mandatory and ensure that consumers receive consistent levels of protection if they fall victim to an APP scam. These protections start for everyone on October 7.

“Under these proposals, consumers in the UK will receive world-leading protection, while also making sure payment providers are incentivised to prevent fraud from happening in the first place.

“The proposed new cap is based on our assessment of evidence we gathered and will still cover the overwhelming majority of APP scams – with 99% of claims (by volume) covered.”