Banks WILL be forced to refund victims of fraud
In victory for Mail campaign, new law means...
BANKS will be ordered to reimburse all victims of online fraud under laws to be brought forward this month.
In a major victory for the Daily Mail’s Stop the Scammers campaign, financial regulators will be given powers to require banks to compensate people ripped off by online fraudsters.
The move is designed to end the lottery which means around half of all fraud victims are refused help by their bank.
Treasury minister John Glen praised the Mail’s campaign and said the Government was determined to tackle the growing menace. ‘The current situation where customers can’t be absolutely sure they will be reimbursed for fraud is not acceptable,’ he said.
‘The banks have done some work but there has been an inconsistency. We want to make this mandatory so that people can be 100 per cent sure that action will be taken.’
Whitehall sources said the new measures would be included in the Financial Services and Markets Bill later this month.
The law will place a duty on the Payment System Regulator to tackle the issue, and give the watchdog powers to order the banks to comply. Under the current voluntary scheme some banks require customers to show they have taken steps to protect themselves before they will compensate, while others refuse most claims.
Mr Glen said that customers faced ‘very, very sophisticated frauds’. He cited one case in his own Salisbury constituency where a scammer posing as a utility company correctly told the victim that roadworks had been carried out in their street that week before demanding payment.
The regulator will finalise the new compensation scheme later this year, but Mr Glen said the ‘default’ should be that customers are reimbursed in full.
The legislation is targeted at the growth in ‘authorised push payment’ fraud, under which a payment is sent under false pretences. It will take about a year before the new mandatory system takes effect.
Banks say that a record £1.3billion was lost to scammers last year, including almost 200,000 authorised push payment frauds.
Mr Glen said ministers were also acting on another of the Mail campaign’s demands by requiring banks to extend the ‘confirmation of payee’ scheme which verifies account details before funds are sent.
He said that by the end of next year this would cover over 99 per cent of payments.
This newspaper is also calling for the appointment of a dedicated minister for fraud, and demanding that police make tackling fraud a priority and boost the number of specialist investigators.
Yesterday a former HM Inspector of Constabulary warned that the police were ‘nowhere near addressing online fraud and crime’.
Zoe Billingham told BBC Radio
4’s Today programme: ‘There been an exponential increase in online fraud and crime. Have the cops got the skills to be able to tackle and address that? At the moment, they’re absolutely nowhere near.
Sources last night told the Mail that Priti Patel has demanded a new fraud strategy by the early autumn to ensure the crime is treated as a higher priority.
The failing Action Fraud system will be replaced by one spearheaded by the National Crime Agency. It will look at whether reports of fraud are assigned correctly, with major changes understood to be on the cards.