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Refund scheme for fraud victims begins

Protections for victims of authorised push-payment (APP) fraud have come in, although not all banks are signed up to the voluntary scheme put forward by the Payments Systems Regulator (PSR).

In all, 17 banks have signed up to the code, which will see a new set of criteria applied to judge whether the customer should get their money back.

 

Previously, banks would only reimburse customers if there was an obvious fault in the way the payment was handled by the bank.

 

According to trade body UK Finance, APP frauds cost £354.3m last year, with £228.4m lost to consumers and £126m to non-personal or business account holders. In total there were 84,624 cases, with 78,215 related to personal accounts.

 

Under the code, anyone who has “taken reasonable care” or has any level of vulnerability, is more likely to receive a refund from their bank.

 

An APP scam is when a consumer is tricked into transferring money to a fraudster and they authorise the payment to be made.

 

Anyone who has already been a victim of APP fraud cannot ask for their case to be reconsidered under the new rules.

 

A victim who has been "grossly negligent" will not be reimbursed.

 

The full list of banks participating in the scheme has not yet been released, although in April, TSB announced it would be adopting the refund policy.

 

Keith McGill, head of ID & fraud at Equifax UK, said: "The new voluntary code for payment providers coming into force today demonstrates the industry commitment to tackling this type of scam. The code supports rules introduced by the Financial Conduct Authority (FCA) earlier this year, which give consumers stronger redress with the recipient bank or building society being used by the fraudster, in addition to their own.

 

“Payment providers have been working hard to deploy solutions to meet the new code and play their part in mitigating APP fraud, and it is vital that these efforts continue. This new code is a good example of how the industry can work together to develop lasting solutions to address fraud and improve outcomes for consumers and businesses alike.”

 

Chris Hemsley, co-managing director of the PSR, said: “APP scams can have a devastating impact on the people who fall victim to them. The code is a major step-up in protections and it reflects our strong belief that if somebody has done everything they can reasonably do to protect themselves, they should be reimbursed. I welcome the commitment that these banks have made to their customers.

 

“There has been a significant amount of work by consumer groups and the industry to develop and deliver this code and we are really pleased that these new protections are now available.”

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