Banks to pay victims of fraud after £145m was lost in ‘push payment’ scams in first half of 2018
Banks — including Barclays, HSBC, Lloyds and RBS — have agreed to contribute to a fund for victims
BANKS have agreed measures to refund victims of sophisticated fraud, it has been revealed.
Officials had previously refused to pay compensation if neither they nor the customer were to blame.
This has seen customers conned and tricked out of large amounts of cash by scammers often pose as bank staff, solicitors or tax inspectors to con people into transferring cash or handing access to accounts.
They include 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.
But now a group of banks has agreed to contribute to a fund to ensure victims are not left out of pocket.
How to protect yourself from fraudsters
ACTION Fraud recommends taking the following advice to stay safe:
- When making a purchase, be suspicious of any requests to pay by bank transfer or virtual currency instead of safer methods, such as credit card or payment services such as PayPal.
- Listen to your instincts: If something feels wrong then it is usually right to question it. Don’t pay for goods or services unless you know and trust the individual or business.
- Personal information obtained from data breaches is making it increasingly easier for fraudsters to create highly targeted phishing messages and calls - watch out for these.
- You shouldn’t assume the caller is genuine just because they’re able to provide some basic details about you.
- Always be suspicious of unsolicited requests for your personal or financial information.
Stephen Jones, head of trade body UK Finance, told the Treasury Committee that the scheme would be an interim measure until a permanent solution could be agreed with watchdogs.
He said: "If a customer has done what they are required to do, they will be reimbursed.
"If we look at the 2018 data, assuming that 2019 is the same, we think the banks will probably be reimbursing somewhere between £30million and £40million more out of the authorised push payment victim pool as a result of the code in “no blame” scenarios."
When pushed on when customers aren't to blame, Chris Rhodes, chief product and propositions officer at Nationwide, explained: "We see customers give their debit card and PIN to flatmates.
"If you do that and your debit card and PIN is used to authorise a payment, you will be liable for the loss."
Tory MP Nicky Morgan, chairwoman of the committee, told the Daily Mail: “It is encouraging to hear that banks on the steering group — which includes Barclays, HSBC, Lloyds and RBS — have committed to fund an initial contribution to reimburse consumers in such cases.
“It is also encouraging to hear that those not on the steering group, including Santander and Nationwide, have made the same commitment.”
Sponsored content: Be in control of your bills - and save up to £518
SWITCHCRAFT is a free service that finds you the right energy deal - and you could save up to £518 a year.
- Sign up, compare and switch with
- You’ll automatically be switched at the end of your new plan when a cheaper deal comes up
- Get £5 free cashback when you
A fiver will be paid into your bank account within four months of completing the switch. prepayment meter customer customers will receive a £5 Amazon voucher. Open to those 18 and over. UK residents only. Click here for full T&Cs.
Further details on when the code will launch will be announced this month.
But plans to fund victims with cash from frozen accounts won't go ahead as the money has been earmarked for something else.
Around £1million a day is stolen through authorised push-payment fraud — where customers are tricked into moving money into accounts controlled by criminals.
While just over £500million was stolen by criminals through authorised and unauthorised fraud in the first six months of 2018, but officials fear the true total could be much higher.
most read in money
Gareth Shaw, head of money at consumer group Which?, said: “This long-awaited move to ensure victims of bank transfer scams are properly reimbursed when neither they nor the bank is at fault is a major victory for consumers.
“The banks must now act to ensure this scheme is implemented swiftly so consumers can have confidence that losing life-changing sums of money to this type of fraud is a thing of the past.”
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516. Don't forget to join the for the latest bargains and money-saving advice.