People tricked into transferring money more likely to be reimbursed
Consumers who have been tricked into transferring money directly to a fraudster may find they are more likely to get their money back after an industry code was agreed.
Concerns were raised by consumer campaigners that victims of these scams, known as authorised push payment (APP) fraud, may lose life-changing sums of money and never see their money again because they have authorised the bank transfer.
But a new voluntary industry code of good practice to protect people from APP scams has been agreed and will take effect from May 28.
Customers will still have to take reasonable care to make sure the person they are transferring money to is legitimate – and in “no blame” scenarios they could find themselves being reimbursed.
Such frauds often involve criminals posing as someone the victim thinks is legitimate, such as staff at a bank or a business.
The Payment Systems Regulator (PSR) said the code reflects its continued strong belief that if somebody has done everything they can reasonably do to protect themselves, they should be reimbursed.
It said that even if blame cannot be attributed to either the consumer or the banks, consumers will be reimbursed.
Hannah Nixon, managing director for the PSR said: “From May 28, consumers will have better protection from APP scams than they have ever had before.
“The code is a testament to the significant work that has gone into protecting people from APP scams.
“It shows that by bringing together consumer and industry representatives, very positive outcomes can be achieved.”
Katy Worobec, managing director of economic crime at UK Finance, said: “This voluntary code is an important step in strengthening requirements for customer protection.
“It delivers a commitment from all firms who sign up to the code from May to reimburse victims of authorised push payment scams in any scenario where their bank or payment service provider is at fault and the customer has met the standards expected of them under the code.”
Consumer group Which? previously made a “super-complaint” over the issue.
Gareth Shaw, head of money at Which? said: “Two years since our super-complaint highlighted a lack of protection for bank customers, the publication of this code is a significant step – but it will only be judged a success if the action taken by banks results in fewer scams and if all victims are treated fairly and reimbursed swiftly.
“It is now vital that all banks, building societies and other payment service providers sign up to the voluntary code and ensure that victims are not forced to clear unreasonable hurdles to prove they are not at fault when they have been targeted by fraudsters.”