RULE CHANGE
Huge change to bank rules in days confirmed as payouts slashed for fraud victims
Read our tips on how to protect yourself from scams.
SCAM victims tricked into sending money to fraudsters from their accounts will see compensation sliced under plans confirmed today.
Customers who unwittingly transfer cash to con artists had been due to receive reimbursement of up to £415,000 under new rules coming in days.
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But now payouts have been given a ceiling of £85,000 when rules take effect on October 7, the Payment Systems Regulator (PSR) confirmed today.
The change comes after a “lobbying campaign" from some firms in the payments industry,” according to Rocio Concha, director of policy and advocacy at consumer group Which?.
She added: "People don't fall victim to scams because they're careless, but because they're ruthlessly manipulated.
"As the disastrous consequences of this decision for scam victims become apparent, the regulator must carefully monitor its impact and be ready to intervene with better protections for victims along with stronger financial incentives for banks and payments firms to tackle fraud."
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Fraud is broadly split into authorised and unauthorised.
People who are tricked willingly giving cash or providing consent to fake payments are classed as authorised fraud.
Victims were tricked into giving away £459.7m through authorised push payment (APP) fraud, according to financial figures from industry body UK Finance.
Purchase scams are the biggest driver of authorised fraud with people buying in advance for bogus goods or fake services that never materialise, usually through social sites such as Facebook.
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Unauthorised fraud, on the other hand, is where criminals typically steal financial information to take out products in victims’ names.
Victims of APP fraud currently receive 62% of cash back after being scammed compared to 98% of unauthorised targets.
A woman has told how she lost £19,700 after falling for an elaborate scam while hunting for a studio flat
The new rules were part of efforts to tackle this issue to make sure victims are fairly reimbursed.
Up until now, banks have just signed up to a voluntary reimbursement code.
In a statement the PSR said new requirements will provide "world-leading protections" to people who fall victim to scams.
The body added: "This was a carefully balanced decision – which provides significant protection to fraud victims and strikes an appropriate balance having regard to the PSR’s innovation and competition objectives and making sure that payment systems work well for everyone."
More than 99% of APP claims will be covered by the £85,000 reimbursement cap, according to the PSR.
A final policy statement to explain the reasoning for the decision is due to be published next week.
The Financial Ombudsman Service (FOS) revealed that scam-related complaints have recently reached their highest level since at least early 2018.
In the first quarter of this financial year (April 1 to June 30), consumers lodged 8,734 gripes about fraud and scams.
More than half were in related to authorised push payment scams.
HOW TO PROTECT AGAINST SCAMMERS
More than three quarters of authorised fraud starts online.
When handing over cash for goods or services found online that you haven’t yet received you should be extra vigilant for scams.
Fraudsters often use popular events such as the recently announced Oasis concerts, to prey on victims.
Buy from reputable sources and sites to protect yourself.
Alarm bells should be ringing if prices are too good to be true.
Take the time to carry out extra checks on unknown sources.
Fraud cases that originate through phone calls make up fewer cases but losses are often far larger. These are typically when criminals impersonate banks or other trusted sources.
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It’s ok to reject, refuse or ignore requests for cash. Usually it is criminals that will try to pressure or rush you into payments.
If you are in doubt over a caller’s identity, call a trusted company or organisation phone number to check.
How to protect yourself from scams
BY keeping these tips in mind, you can avoid getting caught up in a scam:
- Firstly, remember that if something seems too good to be true, it normally is.
- Check brands are "verified" on Facebook and Twitter pages - this means the company will have a blue tick on its profile.
- Look for grammatical and spelling errors; fraudsters are notoriously bad at writing proper English. If you receive a message from a “friend” informing you of a freebie, consider whether it’s written in your friend’s normal style.
- If you’re invited to click on a URL, hover over the link to see the address it will take you to – does it look genuine?
- To be on the really safe side, don’t click on unsolicited links in messages, even if they appear to come from a trusted contact.
- Be careful when opening email attachments too. Fraudsters are increasingly attaching files, usually PDFs or spreadsheets, which contain dangerous malware.
- If you receive a suspicious message then report it to the company, block the sender and delete it.
- If you think you've fallen for a scam, report it to Action Fraud on 0300 123 2040 or use its .
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