Financial watchdog throwing its weight behind scam victims
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nnnVictims of bank transfer fraud could soon get more help claiming their money back.
Almost 45,000 people lost £ 236 million last year to “push payment” fraud, according to data from UK Finance.
But now people who unwittingly send bank transfers to scammers will have more scope to make a complaint, under new Financial Conduct Authority ( FCA) plans.
The proposed change would allow victims to escalate complaints to the Financial Ombudsman Service if they are unhappy with the actions of the bank that received their funds.
Currently, if you send money to a fraudster via bank transfer, your scope for recovering the funds is limited.
You may be able to complain to your own bank, but it will generally have no power to recover the money once it has left your account.
Under current regulations, you have no right to complain if the bank that received your funds doesn’t take sufficient action – and if it refuses to help you or simply doesn’t respond, you can’t complain to anyone.
The FCA watchdog has now proposed that banks and building societies which receive transfers related to a scam should be required to handle any complaints in line with the FCA’S handbook.
If the bank fails to do so, consumers would be able to turn to the Financial Ombudsman Service, which would have the power to make a ruling and resolve the dispute.
These types of cases – also known as APP ( Authorised Push Payment) scams – describe a person being tricked into sending money to a scammer by bank transfer. If you fall for a scam and pay by credit card, you can usually reverse the payment and recover your funds under Section 75 of the Consumer Credit Act. But if you pay by bank transfer, clawing back your funds is much more difficult.
Your own bank usually cannot cancel the payment, unless you act within a short timeframe.
From January this year your bank was required to liaise with the bank that received the funds on your behalf to try to recover the money.
But, if you’re not happy with the way the receiving bank responds, you have no power to complain – a situation the FCA is now proposing to change.
Christopher Woolard, FCA executive director, said: “The FCA takes push payment fraud and the harm it causes to consumers very seriously.
“Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it.
“We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the Financial Ombudsman Service.”