Refund hopes rise for push payment scam victims

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Angelene Bungay

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Angelene Bungay lost £13,000 after transferring it to someone she thought was her builder

More consumers who fall victim to “push” payment scams will be reimbursed by their bank under proposed new rules.

A draft voluntary code for banks is aimed to preventing “Authorised Push Payment” (APP) scams.

Such scams trick account holders into authorising a payment to another account – usually a fraudster.

Banks typically refund only about a fifth of the money that goes missing, leaving some thousands out of pocket.

Consumer rights group Which? initiated a super-complaint about APP scams two years ago.

Jenni Allen, managing director of Which? Money, said the call to reimburse innocent victims of such scams was a “significant win” for consumers.

She warned the new code would only be judged a success if banks protect more customers from scams and “swiftly” reimburse those targeted by criminals.

“It’s simply unacceptable that in cases where banks claim they could not have done anything more, it will still be the victim who is left to bear the cost – often with devastating consequences,” Ms Allen said.

One APP victim was Angelene Bungay of Shrewsbury, who was duped into paying £13,000 to someone posing as the builder carrying out her loft conversion.

Her bank said that despite Mrs Bungay being one of a growing number of APP victims, she would not be refunded.

Barclays, HSBC, Lloyds, Metro Bank, RBS and the Electronic Money Association were some of the organisations involved in drawing up the draft standards, as well as consumer groups Which? and Age UK.

Earlier this week the banking industry said criminals had stolen more than £500m from private accounts in the first half of the year.

That included more than 34,000 APP scams, where individuals unwittingly transfer cash to fraudsters.

The code aims to make it harder for criminals to commit push payment fraud, sets out how consumers can protect themselves and get better protection and support from their banks.

“This publication marks an important step towards greater and more consistent protection for consumers and stronger standards for how banks and other payment service providers will prevent this type of fraud happening in the first place,” said Ruth Evans, chair of the APP scams steering group set up by the Payment Systems Regulator.

A draft is open for consultation until 15 November and the final version is intended to be agreed by early next year.

Stephen Jones, chief executive of UK Finance, which represents banks, said the industry would work with partners to identify a sustainable way to reimburse consumers.

“It is vital that we get the right outcome for customers… while ensuring innocent victims and customers are not penalised for the criminal actions of others,” he said.

Financial services firms “have now got a clear sighting shot as to the overall direction of travel” in terms of reimbursement for fraud, he said, while consumers should have greater consistency in being able to get money back.

Some of the issues must be resolved by new regulation, rather than a voluntary code alone, UK Finance added.

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