More help proposed for people tricked into transferring money to fraudsters

PA

People who are tricked into transferring money to a fraudster could soon find it easier to make a complaint, in cases where they believe the bank receiving the money did not do enough to prevent it.

The Financial Conduct Authority (FCA) has proposed changes to complaint handling rules to help victims of this type of scam - known as authorised push payment (APP) fraud.

APP fraud happens when a fraudster tricks someone into instructing their bank to send money from their account to an account controlled by the scammer.

UK Finance data shows there were 43,875 cases of APP fraud and total losses of £236 million in 2017.

Currently, when their own bank is not at fault, victims of this type of fraud cannot complain to the payment services provider receiving the money.

But now, the FCA is proposing to change the rules to allow those eligible to be able to take complaints to the Financial Ombudsman Service - which resolves disputes between consumers and financial firms - if they are unhappy with the outcome reached by the receiving bank, or if they have not received a response to the complaint at all.

The aim of the proposed changes is to reduce the harm experienced by victims of APP fraud.

Christopher Woolard, FCA executive director of strategy and competition, said: "The FCA takes push payment fraud and the harm it causes to consumers very seriously.

"Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it.

"We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the Financial Ombudsman Service."

A consultation on the proposals will close on September 26.

The FCA also plans to consult, later in the year, on requiring payment services providers to report data on the complaints about alleged APP fraud that they receive.

This can then be used by the industry as an indicator of progress on work to tackle this type of fraud, which was previously the subject of a "super-complaint" in 2016 by Which?.

The consumer group voiced concerns that, unlike many other payment methods, victims conned into transferring money by bank transfer to a fraudster have no legal right to get their money back from their bank.

In 2016, following the Which? complaint, the Payment Systems Regulator (PSR) set out an action plan, saying more could be done to prevent scams happening in the first place and to respond faster to help people get their money back.

Meanwhile, the Government-backed Take Five - To Stop Fraud campaign urges people to pause for thought before transferring money.