Protection plan might actually boost
SOME banks are fearful fraudsters could actually be encouraged to carry out more scams tricking people into transferring their money if a “reimbursement environment” is created, writes VICKY SHAW.
The claims follow concerns that, at present, people who are tricked into making bank transfers directly to a fraudster may never see their money again as they authorised the payment.
This type of fraud is known as authorised push payment (APP) fraud.
An APP fraud steering group which launched a consultation looking at how people tricked in this way can be better protected – has now published responses from banks, consumer groups and others.
A draft voluntary code aims to reduce APP scams and the harm caused to victims, setting out how consumers can take reasonable steps to protect themselves, while giving them greater support and levels of protection from their banks.
One issue being looked at is a funding mechanism which could see consumers reimbursed in cases where scam victims took the requisite levels of care, but no bank or other payment provider involved breached standards.
HSBC UK’S response, was: “We believe there is a real risk that a CRM (contingent reimbursement model) could, at least initially, see an increase in APP scams.
“Although the draft code has been developed to mitigate this risk where possible, we believe that a reimbursement environment may drive increased activity by scammers and reduce customer vigilance.
“There must be a mechanism to monitor this environment and to evolve the code to respond accordingly.”
Meanwhile Barclays said: “We disagree with the notion that payment service providers should accept all liability for a scam in the instance that ‘no blame’ can be attributed to either party.
“If this were to happen, consumers may see little benefit in protecting themselves online (leading to greater volumes of fraud and scams), with PSPS effectively taking responsibility for the criminal behaviour of fraudsters and, at times, customer behaviour.”
Meanwhile Age UK says there has been a lack of clarity regarding firms’ security instructions to customers, and Which? argues there now needs to be urgent agreement on how to fund the reimbursement of victims in “no blame” cases.
Ruth Evans, independent