Banks could be made to repay scam victims

BANKS will have to refund victims who transfer money to scammers, under government-backed plans.

The Payments Systems Regulator, the banking watchdog, wants reimbursing customers who have lost out to frauds to be mandatory.

John Glen, economic secretary to the Treasury, said the Government would “legislate to address barriers to regulatory action at the earliest opportunity”.

The plans, which were revealed by this newspaper in December last year, mean victims will have a far higher chance of getting their money back.

Which? hailed the announcement as a “huge win” for consumers.

The rules will apply to “authorised push payment fraud”, where criminals convince victims to transfer money from their bank accounts.

Such scams cost Britons half a billion pounds per year. Cases soared during the pandemic, up 71 per cent in the first half of 2021 on the same period the year before, according to the banking trade body UK Finance.

Victims have included Helen Skelton, the TV presenter, and Drew Pritchard, from Salvage Hunters. Policy makers have previously tried to protect consumers, including introducing a voluntary code of conduct on refunds in 2019.

This set out that customers should be refunded in cases where the bank could have done more to prevent the fraud.

Most major banks are signatories, however not all signed up. Some banks that enlisted failed to follow the spirit of the guidelines, according to the Financial Ombudsman, which found they had wrongly rejected thousands of legitimate claims.