While banks drag their heels over new rules, losses from bank transfer fraud are spiralling out of control, Which? has warned.

Figures from the consumer association show a staggering £674 is lost each minute to push payment fraud, working out at £40,445 an hour, £970,685 a day and £29.5 million a month.

Which? head of money Gareth Shaw said: “For too long, victims of bank transfer fraud have lost life-changing sums and subsequently faced a gruelling battle to get their money back."

There is a plan in the works to crack down on this - or at least get customers their money back if they are hit - but it's still not fully adopted.

“Banks must offer much greater protection to consumers, while quickly and fairly reimbursing those who are unfortunate enough to fall victim," Shaw said.

“Failure to do so will require swift intervention from the regulator- as these devastating scams can’t be allowed to derail lives any longer.”

How push payment fraud works and the plans to stop it

The impact is devastating

Push payment fraud is when a criminal convinces someone to transfer them cash - often by impersonating the police, a the tax man or even the customer's bank itself.

They can be incredibly convincing and have a string of tricks to make you believe you're acting in your own interest.

However, as it's you making the transfer, banks have previously said it's not their fault and refused to reimburse victims.

Last year, less than a quarter of the money lost to this sort of fraud was returned to consumers.

Which?  is calling for all banks to urgently reassure their customers they will be better protected against fraudsters by signing up to a new voluntary industry code, which comes into effect next week.

The code is designed to offer better protection and ensure people who lose money through no fault of their own are swiftly reimbursed.

But so far just eight banks have signed up to it.

People frequently think they are keeping their cash safe
 

New rules to make sure victims of "push payment" fraud are refunded by their bank - instead of just 1 in 5 of them

UK Finance, which represents British banks, said protecting customers as one of the industry's "foremost priorities" in response.

“It is vital that we get the right outcome for customers by ensuring that customers making payments are not penalised for the criminal actions of others even in circumstances where the payment services provider has done everything reasonably expected of it to protect the customer under the Code," said UK Finance chief executive Stephen Jones.

He added: "The new Code delivers a commitment from all firms who sign up to it to reimburse victims of authorised push payment scams in any scenario where the customer has met the minimum standards expected of them under the Code."

A more secure system is in the works
 

There is also even stronger protection in the works, with the payment system regulator taking steps to prevent you ever transferring cash to someone you don't know by accident.

But the introduction of this "confirmation of payee" system has been delayed until March 2020.

Jones said: "The industry will continue to fight fraud on every front to protect customers and prevent this kind of crime – investing in advanced security systems and new ways to track stolen funds, preparing for the roll out of 'confirmation of payee' capability across payment systems, assisting law enforcement in tackling the criminals and supporting the government in improving how intelligence is shared.”

Which? was less impressed. "This new date is nine months later than its original deadline of July 2019, and is likely to result in an additional £109m being lost to scams," it said.

The consumer association issued fives tests to check if banks were doing enough:

Banks must promise to protect their customers by signing up to the Code with the regulator pledging to conduct a one-year review on its effectiveness.

The regulator must ensure all banks introduce vital name-check security (confirmation of payee) no later than its new deadline of March 2020. The latest delay will cost people an additional £109m in losses while they wait for this important measure.

No blameless scam victim should ever be denied reimbursement again, and full refunds should be issued swiftly.

Banks must show they are serious about protecting consumers by immediately agreeing a long-term funding solution for no blame refunds.

Banks must publish victim and reimbursement figures on a regular basis to allow effective monitoring in the fight against transfer fraud.

"Until these steps are taken, the devastating effect of bank transfer scams will continue to cause growing financial and emotional harm to UK Consumers," Which? chief executive Anabel Hoult wrote in a letter to UK Finance's Jones.

Who's signed up to the new code so far

These are the banks that have committed to signing up to the new code surrounding payment fraud: