Banks will be forced to reimburse victims of fraud within five days, under new laws.
New rules will require banks to give victims their money back within one working week, apart from in cases of gross negligence or where supposed victims are found to have played a role in the fraud.
Currently scam refunds are paid in line with a voluntary code of guidelines, but not all banks are signed up and fewer than half of victims get their money back.
The cost of the mandatory reimbursement will be split 50:50 between the firms sending and receiving the payment, so that all banks and building societies will be incentivised to take preventative action on “APP” scams, the Payment Systems Regulator, which has been consulting on the new measures, said.
“APP fraud”, or Authorised Push Payment fraud – where someone is tricked into sending money to a fraudster – is widespread in the UK, costing victims nearly £500m last year, according to the latest figures from UK Finance, the banking tradebody.
There will be no minimum value threshold for APP fraud claims. In a previous consultation, £100 was proposed as the minimum threshold – but this has now been scrapped after MPs questioned why scam victims who lost less than £100 should not be refunded.
There will however be a cap on how much victims can claim. This maximum value threshold, which is still being consulted on, will be published in the final quarter of 2023.
The PSR said its new rules will be imposed on the Faster Payments System, a quick payments system used by banks to transfer sums in real time up to the value of £1m. This is where the majority of APP fraud takes place.
The Financial Services and Markets Bill, currently making its way through Parliament, will allow the watchdog to compel firms to reimburse victims and is expected to receive Royal Assent this year. The reimbursement requirements will then come into effect from 2024.
MPs have questioned the long delay on making reimbursement mandatory. The Treasury Committee, a group of MPs, first called for it in 2019. In February, the Treasury Committee called the delays “unacceptable” and said that mandatory reimbursement must be fully implemented by the end of this year.
Andrew Griffith, Economic Secretary, said: “This is an important step in the Government’s fight against fraud.
“As payment scams become ever more sophisticated, it is right that the Government, the regulator and industry work together to ensure victims are not left out-of-pocket by fraudsters.
“In parallel, the Government is looking at how to enable banks to have the ability to identify and pause suspicious payments inflight where appropriate.”
Last month, the Government announced a major crackdown on organised scam gangs, including a ban on cold calling to sell financial products and a clamp down on number spoofing, with the aim of reducing fraud by 10pc on 2019 levels by 2025.
Home Secretary Suella Braverman promised at the time to stop “text scam misery”, noting that fraud accounts for 41pc of all crimes across England and Wales.
I’d like examples of gross negligence as this seems quite open to nothing changing at large. Many of the cases I deal with, involve negligence on some part unless it appears there is an insider.
This feels odd, to be making the provider responsible for the users actions..
Should kia replace my car if I crash it? Should Samsung replace my phone if I drop it?
Prepare for banks demanding to know everything up to the favourite color of who you are talking to whenever you want to move large sums of money around.
All this really means is more hoops to jump through for those who are careful in the first place to protect those who are frankly, negligent in managing their finances.
I’m all for enforcing refunds in genuine cases, it shouldn’t be discretionary for banks. But what this will mean in reality is they will make it more hassle to send, receive or spend money in order to limit their liabilities.
It’s already a ball-ache as it is, having to receive loads of OTP, do biometric scans, tell the bank you have understood the nature of the transaction etc.
This strikes me as more red-meat for the more ignorant members of society who, despite decades of warnings, endless notifications, prompts, tv shows, news articles and the like, still just go ahead with sending money in ridiculous circumstances.
If the legislation that enables this also ensures that financial institutions do not make life more onerous for the rest of us, it can’t be bad. But it never works out that way.
30 years ago if someone walked into the bank and took out money in my name it was called Fraud and it was considered the bank’s problem. Today if someone does it it’s called Identity Theft and it’s considered my problem.
This is a good step to take. Too many industries have gotten away with walking back hard won consumer and worker protections by pretending it’s different because it’s on the computer now. It’s not, there are solutions, they just cost money to implement and these industries have gotten greedy.
“Does that mean because this Sunak Government is a fraud, that banks have to refund all the tax money we pay from our accounts?”
– – – Dorothy from West Dorset
The amount of shills in here trying to make people feel sorry for the banks. Piss off.
Stupid idea that will just increase the fees that banks charge customers.
Gross negligence is obvious cases of fraud, e.g. random telling you you won a lottery you never played, or a Nigerian prince wanting to send you their inheritance provided you pay the transfer fee.
That said there are very sophisticated methods used by fraudsters today that can fool even the most diligent eyes. Unless a person receives training on how to reconize spoofed emails, fraudulent links on phishing emails and texts that appear legit, the more vulnerable in society will be poised to lose everything in one moment.
I have a feeling this won’t matter at the end of the day. From what I hear most cases get blamed on the victim for negligence anyway.
However, I’m all for banks having to refund this stuff, even if negligence is involved. Because if there is one thing that causes action in this country, it’s when banks may lose money.
I’m fed up of being the protector for my family and friends against these scammers. I don’t know what to do with these things, it’s just I’m *slightly* more tech savvy than them.
It feels like nothing is being done at all to protect us from these scams. And I’m not just on about fake tech support scams, I’m on about things like the ads on Google when you search for things like ‘car insurance claims’ being dodgy, data farming companies too. If this kicks off some action then I’m all for it.
Could my mate be the scammer and we are then both quids in
so that leads to the possibility of a scam whereby a stooge agrees to be scammed so that they can reclaim all the money within 5 days and split it. Or even themselves be ‘the scammer’.
Thought of that yet have they?
This makes a lot of sense simply because when it was the consumers problem the banks just doffed it off and didn’t care. If they have to recover the money, there’s a much greater chance that scammers will be chased down and caught out.
So someone can willingly send thousands to a spoof account even if they’ve been warned by the bank staff and they get refunded, yet if someone commits ID theft the victim gets held liable (this happened to me! The police refused to class it as a crime, so the finance company and courts refused to believe it wasn’t me who took out various loans and I ended up with CCJs)
Dare I say it…I feel sorry for the banks here in some of these cases?
The banks shout “ARE YOU SURE TANYA?” a million times before you can make an online transaction…but if Tanya believes her online Moroccan boyfriend needs £100,000 then what can they do?
Why should they reimburse that type of stupid choice? Same goes for clicking stupid looking emails/texts etc and then proceeding to enter all your key security data .
It’s been drummed into us enough times.
I do agree for when there has been blatant theft through no fault of the user such as identity theft, hacking etc.
Monzo do this for me anyways. Had to use it twice. Money instantly back in my bank account after claim made.
Now they have to cough up they’ll start taking fraud seriously.
I’ve gotten soo good that last scammer that called me said, learn some manners, you didnt have to be so rude you dickhead. Been laughing about this the whole week
This is almost karma for banks a little
Yes the average person is completely oblivious to scams and how they get them to do some of the things I don’t know however the banks recent agenda has been to get people out of branches onto online and mobile banking. Again that’s fine for those that have grown up in this age but for the elderly the push out of branch and onto technology has left them very vulnerable
Possibly a stupid question but could someone explain to me how this doesn’t just incentivise this type of crime?
Can I get all my taxes back please, Barclays? I have been scammed by the Tories.
Why is the bank responsible for people being idiots? The majority of “scams” are merely people not engaging common sense before they do something.
23 comments
***From The Telegraph’s Charlotte Gifford:***
Banks will be forced to reimburse victims of fraud within five days, under new laws.
New rules will require banks to give victims their money back within one working week, apart from in cases of gross negligence or where supposed victims are found to have played a role in the fraud.
Currently scam refunds are paid in line with a voluntary code of guidelines, but not all banks are signed up and fewer than half of victims get their money back.
The cost of the mandatory reimbursement will be split 50:50 between the firms sending and receiving the payment, so that all banks and building societies will be incentivised to take preventative action on “APP” scams, the Payment Systems Regulator, which has been consulting on the new measures, said.
“APP fraud”, or Authorised Push Payment fraud – where someone is tricked into sending money to a fraudster – is widespread in the UK, costing victims nearly £500m last year, according to the latest figures from UK Finance, the banking tradebody.
There will be no minimum value threshold for APP fraud claims. In a previous consultation, £100 was proposed as the minimum threshold – but this has now been scrapped after MPs questioned why scam victims who lost less than £100 should not be refunded.
There will however be a cap on how much victims can claim. This maximum value threshold, which is still being consulted on, will be published in the final quarter of 2023.
The PSR said its new rules will be imposed on the Faster Payments System, a quick payments system used by banks to transfer sums in real time up to the value of £1m. This is where the majority of APP fraud takes place.
The Financial Services and Markets Bill, currently making its way through Parliament, will allow the watchdog to compel firms to reimburse victims and is expected to receive Royal Assent this year. The reimbursement requirements will then come into effect from 2024.
MPs have questioned the long delay on making reimbursement mandatory. The Treasury Committee, a group of MPs, first called for it in 2019. In February, the Treasury Committee called the delays “unacceptable” and said that mandatory reimbursement must be fully implemented by the end of this year.
Andrew Griffith, Economic Secretary, said: “This is an important step in the Government’s fight against fraud.
“As payment scams become ever more sophisticated, it is right that the Government, the regulator and industry work together to ensure victims are not left out-of-pocket by fraudsters.
“In parallel, the Government is looking at how to enable banks to have the ability to identify and pause suspicious payments inflight where appropriate.”
Last month, the Government announced a major crackdown on organised scam gangs, including a ban on cold calling to sell financial products and a clamp down on number spoofing, with the aim of reducing fraud by 10pc on 2019 levels by 2025.
Home Secretary Suella Braverman promised at the time to stop “text scam misery”, noting that fraud accounts for 41pc of all crimes across England and Wales.
**Read more: https://www.telegraph.co.uk/personal-banking/current-accounts/banks-refund-scam-victimsithin-five-days-new-law/**
I’d like examples of gross negligence as this seems quite open to nothing changing at large. Many of the cases I deal with, involve negligence on some part unless it appears there is an insider.
This feels odd, to be making the provider responsible for the users actions..
Should kia replace my car if I crash it? Should Samsung replace my phone if I drop it?
Prepare for banks demanding to know everything up to the favourite color of who you are talking to whenever you want to move large sums of money around.
All this really means is more hoops to jump through for those who are careful in the first place to protect those who are frankly, negligent in managing their finances.
I’m all for enforcing refunds in genuine cases, it shouldn’t be discretionary for banks. But what this will mean in reality is they will make it more hassle to send, receive or spend money in order to limit their liabilities.
It’s already a ball-ache as it is, having to receive loads of OTP, do biometric scans, tell the bank you have understood the nature of the transaction etc.
This strikes me as more red-meat for the more ignorant members of society who, despite decades of warnings, endless notifications, prompts, tv shows, news articles and the like, still just go ahead with sending money in ridiculous circumstances.
If the legislation that enables this also ensures that financial institutions do not make life more onerous for the rest of us, it can’t be bad. But it never works out that way.
30 years ago if someone walked into the bank and took out money in my name it was called Fraud and it was considered the bank’s problem. Today if someone does it it’s called Identity Theft and it’s considered my problem.
This is a good step to take. Too many industries have gotten away with walking back hard won consumer and worker protections by pretending it’s different because it’s on the computer now. It’s not, there are solutions, they just cost money to implement and these industries have gotten greedy.
“Does that mean because this Sunak Government is a fraud, that banks have to refund all the tax money we pay from our accounts?”
– – – Dorothy from West Dorset
The amount of shills in here trying to make people feel sorry for the banks. Piss off.
Stupid idea that will just increase the fees that banks charge customers.
Gross negligence is obvious cases of fraud, e.g. random telling you you won a lottery you never played, or a Nigerian prince wanting to send you their inheritance provided you pay the transfer fee.
That said there are very sophisticated methods used by fraudsters today that can fool even the most diligent eyes. Unless a person receives training on how to reconize spoofed emails, fraudulent links on phishing emails and texts that appear legit, the more vulnerable in society will be poised to lose everything in one moment.
I have a feeling this won’t matter at the end of the day. From what I hear most cases get blamed on the victim for negligence anyway.
However, I’m all for banks having to refund this stuff, even if negligence is involved. Because if there is one thing that causes action in this country, it’s when banks may lose money.
I’m fed up of being the protector for my family and friends against these scammers. I don’t know what to do with these things, it’s just I’m *slightly* more tech savvy than them.
It feels like nothing is being done at all to protect us from these scams. And I’m not just on about fake tech support scams, I’m on about things like the ads on Google when you search for things like ‘car insurance claims’ being dodgy, data farming companies too. If this kicks off some action then I’m all for it.
Could my mate be the scammer and we are then both quids in
so that leads to the possibility of a scam whereby a stooge agrees to be scammed so that they can reclaim all the money within 5 days and split it. Or even themselves be ‘the scammer’.
Thought of that yet have they?
This makes a lot of sense simply because when it was the consumers problem the banks just doffed it off and didn’t care. If they have to recover the money, there’s a much greater chance that scammers will be chased down and caught out.
So someone can willingly send thousands to a spoof account even if they’ve been warned by the bank staff and they get refunded, yet if someone commits ID theft the victim gets held liable (this happened to me! The police refused to class it as a crime, so the finance company and courts refused to believe it wasn’t me who took out various loans and I ended up with CCJs)
Dare I say it…I feel sorry for the banks here in some of these cases?
The banks shout “ARE YOU SURE TANYA?” a million times before you can make an online transaction…but if Tanya believes her online Moroccan boyfriend needs £100,000 then what can they do?
Why should they reimburse that type of stupid choice? Same goes for clicking stupid looking emails/texts etc and then proceeding to enter all your key security data .
It’s been drummed into us enough times.
I do agree for when there has been blatant theft through no fault of the user such as identity theft, hacking etc.
Monzo do this for me anyways. Had to use it twice. Money instantly back in my bank account after claim made.
Now they have to cough up they’ll start taking fraud seriously.
I’ve gotten soo good that last scammer that called me said, learn some manners, you didnt have to be so rude you dickhead. Been laughing about this the whole week
This is almost karma for banks a little
Yes the average person is completely oblivious to scams and how they get them to do some of the things I don’t know however the banks recent agenda has been to get people out of branches onto online and mobile banking. Again that’s fine for those that have grown up in this age but for the elderly the push out of branch and onto technology has left them very vulnerable
Possibly a stupid question but could someone explain to me how this doesn’t just incentivise this type of crime?
Can I get all my taxes back please, Barclays? I have been scammed by the Tories.
Why is the bank responsible for people being idiots? The majority of “scams” are merely people not engaging common sense before they do something.