Victims of conveyancing fraud could find it easier to get their money back under a new plans being proposed by the regulator for retail payment systems. The Payments System Regulator has published a report following a super complaint launched by consumer group Which? last year calling for banks to better protect customers who are tricked […]
Victims of conveyancing fraud could find it easier to get their money back under a new plans being proposed by the regulator for retail payment systems.
The Payments System Regulator has published a report following a super complaint launched by consumer group Which? last year calling for banks to better protect customers who are tricked into transferring money to a fraudster.
Push payment scams are where a consumer believes they are sending their money to someone they trust but the payment actually ends up going to a fraudster.
Banks are not currently obliged to pay back consumers that have been conned out of money in this way.
According to figures from UK Finance, in the first six months of 2017 over 19,000 people were a target of push payment scams, involving a total amount of over £100 million.
The PSR is proposing a reimbursement scheme for people that have been tricked into transferring money to fraudsters.
The regulator said that the model sets out the circumstances when victims of scams would get their money back, and which bank or payment organisations should pay.
Reimbursement would depend on whether the banks and payment organisations had met required standards, such as measures and processes that help prevent and respond to scams – and whether the victim had also taken an appropriate level of care in protecting themselves.
However, Hannah Nixon, managing director of the PSR, said there was “no silver bullet” and that some people will still lose out.
“That’s why we’ve continued to look for a solution that could reimburse those who are scammed, and today we begin consulting on an option that we think could work.
“To be successful, the model must be pragmatic. Consumers will need to be vigilant and protect themselves, but equally we expect banks and payment service providers to uphold best practice – and when they don’t there should be reimbursement.”
The PSR said it was seeking feedback on how best to introduce a contingent reimbursement model by September 2018.
Peter Vicary-Smith, Which? chief executive, said: “A year on from our super-complaint, it’s good to see the regulator coming down on the side of consumers. If this stops the huge amounts of money lost to bank transfer scams, it’ll be a significant win.
“To make this a reality, the regulator must now ensure any reimbursement scheme properly compensates victims. Meanwhile, banks must move to quickly put in place better checks and protections to prevent these scams happening in the first place.”
