BANKS have come under fire for delaying plans on how to fund the cash to refund victims of transfer fraud for a second time.
A code to protect victims of so-called authorised push payment (APP) scams was first launched in back in May 2019.
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It sees banks and building societies that are members of the voluntary code compensate people who’ve been scammed, even in a no-blame scenario where neither the customer or the bank is at fault.
But this is a costly business, and banks were supposed to reach an agreement on how to fund this no-blame scenario in the long-term by December 31, 2019.
This deadline was then pushed back until March 31 2020, with the industry trade body today revealing it’s now been extended again until December 31, 2020.
UK Finance says this gives more time for regulators, government and the industry to deliver a long-term solution.
How to protect yourself from fraudsters
ACTION Fraud recommends taking the following advice to stay safe:
- When making a purchase, be suspicious of any requests to pay by bank transfer or virtual currency instead of safer methods, such as credit card or payment services such as PayPal.
- Listen to your instincts: If something feels wrong then it is usually right to question it. Don’t pay for goods or services unless you know and trust the individual or business.
- Personal information obtained from data breaches is making it increasingly easier for fraudsters to create highly targeted phishing messages and calls – watch out for these.
- You shouldn’t assume the caller is genuine just because they’re able to provide some basic details about you.
- Always be suspicious of unsolicited requests for your personal or financial information.
Around £1million a day – or £674 a minute – is stolen through APP – where people are tricked into moving money into accounts controlled by criminals.
£147million was stolen from personal accounts alone in the first half of 2019, according to the latest data from UK Finance.
Before the code came in, it saw people conned out of large amounts of cash and not have a penny refunded, such as landscape gardener David Hunt who lost nearly £10,000 when scammers pretended to be from HMRC.
And grandmother Jo Wilson, who had her £40,000 life savings stolen by scammers posing as staff from NatWest.
The problem is banks want third-party organisations, whose data and platforms are used by criminals to facilitate fraud, to help fund the pot.
They also argue, alongside consumer group Which?, that a voluntary code isn’t enough to protect people and that hard and fast mandatory laws are instead needed.
Plus, not all banks are signed up to the voluntary code, so customers of these providers are also missing out.
Gareth Shaw, head of money at consumer group Which?, said: “While this latest extension will provide some short-term breathing space, it only exposes how far away the industry and regulators are from finding a permanent solution for reimbursing innocent bank customers who fall victim to scams.
“A voluntary industry-led approach is not a long-term solution to the problem. The government must consider directing the regulator to make the code and reimbursement mandatory.”
Stephen Jones, chief executive of UK Finance added: “The banking and payments industry is committed to defending their customers from fraud and stopping stolen money from going to criminals.
“We share the views expressed by the Treasury Committee and Which? that issues of liability and reimbursement should best be addressed by new laws rather than just a voluntary code alone.”
