Banks: Scam refunds make customers careless

BANKS are pushing back against mandatory refunds for all scam victims, saying that it will encourage people to be ‘less careful’ where they send their money.

UK Finance, which represents 300 firms in the banking and finance industry including Barclays, HSBC, Lloyds and NatWest, says automatically refunding victims ‘removes the incentive for customers to take sensible steps to reduce the risk of being defrauded’.

But the excuse was slammed as ‘victim blaming’ by consumer champions yesterday.

Rules being considered by the Payment Systems Regulator (PSR) would require banks and building societies to pay back in full victims of authorised push payment (APP) fraud where the loss is over £100. APP fraud is when a victim is tricked into sending money to a fraudster posing as a genuine payee.

Often scammers pose as a bank staff member or another trusted organisation, have details about their victim and convince them to move money into a ‘ safe’ account. The Daily Mail has longcalled for greater bank-fraud protection through its Stop The Scammers campaign. Around 196,000 people lost £583million to APP scams in 2021 according to UK Finance.

It comes as the Commons Treasury committee today warns that regulators need to ‘get their skates on’ and agree on the details of reimbursement proposals as fraud numbers soar. MP Harriett Baldwin, chairman of the committee, said: ‘Our committee will keep up the pressure so implementation is not half-baked.’

But UK Finance members have appeared to rally against the PSR’s plans, saying mandatory reimbursement ‘may reduce consumer incentive to take appropriate measures to protect themselves against APP scams’. Rocio Concha, policy and advocacy director at Which?, said: ‘It’s disappointing that some parts of the banking industry are opposing vital reforms and choosing to continue victim-blaming.

‘The Government and PSR must quickly implement a system that sees the vast majority of APP fraud victims get their money back.’