At 20.45 hours on 20 Aug 1944, HMS Keppel (D 84) got a contact on her starboard quarter, while escorting convoy JW-59. Together with HMS Kite (U 87) and a Swordfish aircraft from HMS Vindex (D 15) the U-boat was attacked with hedgehogs and depth charges. They hunted the U-boat throughout the night with their foxers (Anti Gnat devices) streamed, but the hunt was fruitless.

At 06.04 hours on 21 August, HMS Kite (U 87) (LtCdr A.N.G. Campbell, RN) had slowed down to 6 knots to clear her foxers, which had become twisted around one another. At this vulnerable moment, U-344 fired a spread of three FAT torpedoes at the sloop, misidentified as Dido-class light cruiser by Pietsch. The ship was struck by two torpedoes on the starboard side and heeled over to that side immediately. The stern broke off, floated for a few seconds, then sank. The bow remained afloat for a minute and then sank at a steep angle.
At 07.30 hours, HMS Keppel (D 84) stopped to pick up survivors, while HMS Peacock (U 96) and HMS Mermaid (U 30) screened the rescue operation. Only 14 of the about 60 survivors in the water could be rescued from the ice cold water, five of them died on board and were later buried at sea.