Fighting back: Scams typically involve a person who is duped into making an online payment to crooks
Details of new rules forcing banks and other payment firms to reimburse customers who fall prey to scammers will be published before Christmas.
The mandatory measures will exchange a voluntary scheme that compensates victims of Authorised Push Payment, or APP fraud where customers are conned into sending money to criminals.
Scams typically involve a person who is duped into making an online payment to crooks posing as a legitimate organisation such as a bank, HM Revenue & Customs or the police.
Fraudsters may also pretend to be selling goods or services that do not exist. Losses from APP fraud totalled £240 million in the first half of 2023 and involved more than 116,000 cases, 22 per cent more than in the same period last year, according to the industry trade body UK Finance.
Banks have been criticised for dragging their feet in compensating victims, or not paying out at all. Under the new compulsory system, reimbursement costs will be split 50:50 between the bank behind the customer’s account sending the funds and the bank receiving them.
The Payment Systems Regulator, the industry watchdog, is expected to flesh out more details of how the scheme will function in the next two weeks.
Some argue the new rules don’t go far enough and should also cover social media companies. ‘We see WhatsApp scams and Facebook Marketplace scams happening every day,’ said Santander UK chief executive Mike Regnier in an interview with Financial Mail.
‘I would appreciate to see other players in the supply chain of fraud pay the bill,’ he added.
