Banks could charge fees or force you to take out insurance to pay for fraud

BANKS could force customers to pay fees or take out insurance to pay for bank transfer fraud under new rules being drawn up by regulators.

Other options include creating a fund to help prevent scams, imposing fines on banks or using cash from dormant accounts to help reimburse customers.

While a new government-run compensation scheme for victims of fraud is also being mooted by bank bigwigs.

But no decision has been made on how to compensate victims of so-called “authorised push payment (APP)” fraud in the meantime.

Over £145million was lost in bank transfer scams in the first half of this year but only £31million refunded to customers, new figures from UK Finance revealed earlier this week.

The new voluntary rules – which banks must sign up to – mean customers will be reimbursed if they’ve done nothing wrong.

In the past, banks could decide whether or not to refund lost cash.

The Sun has revealed how customers have been conned and tricked out of large amounts of cash, such as landscape gardener David Hunt who lost nearly £10,000 when scammers pretended to be from HMRC.

And grandmother Jo Wilson, who had her £40,000 life savings stolen by scammers posing as staff from NatWest.

Banks have been able to wiggle out of paying these “life changing sums of money” and consumers should not have to foot the cost, warns Which? money expert Gareth Shaw.

He said: “Banks can’t leave consumers hanging even longer for an answer on where the money for victims is going to come from.

“It’s been two years since we first submitted our super-complaint and this issue has been going on even longer than this.

“People are losing life changing sums of money and they can’t afford to wait even longer, and they shouldn’t have to fund the cost.”

Martyn James, consumer expert at Resolver, said: “Anything that introduces checks to stop fraud occurring is a good thing for consumers.

“The entire burden for this can’t be on consumers, it’s up to the banks to take responsibility for protecting people – they need to up their game.”

Stephen Jones, chief executive of banking trade body UK Finance, said: “The finance industry is committed to ensuring consumers are better protected from the threat of authorised payment scams.

“The industry is committed to now continuing work with partners to identify a sustainable funding mechanism through which to reimburse consumers.”

He added that the new rules should become regulation – and not just a voluntary code – to help clear up in what circumstances victims should be compensated and where the cash will come from.

Hannah Nixon, managing director of the Payment Systems Regulator, said: “We have always said that more could be done to protect consumers from this type of fraud – to prevent APP scams from happening in the first place and, if they do occur, to reimburse victims if they’ve done nothing wrong.

“There’s still some important work for the steering group to do, but we are fully supportive of the positive outcomes that the code is designed to deliver.”

The rules are under consultation until November this year before a new voluntary code will be drawn up next year.

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