REGULATION MUST END THE REFUND LOTTERY

VICTIMS are legally entitled to a refund in cases where the criminal steals their details and makes the payment, but the law doesn’t currently cover scams where a customer is tricked into transferring the money themselves.

Last year, the banking sector worked with consumer groups to introduce its own voluntary standards to try to address this gap. Nine banks and building societies covering more than 85 pc of the market signed up to a voluntary code under which customers who lose money to these scams through no fault of their own are entitled to a refund.

Almost £90 million has been reimbursed to customers since the code was introduced. However, the industry recognises not all victims are protected by these voluntary measures and there are inconsistencies in how they are being applied.

Customers and firms need certainty, so we are calling for new legislation to put in place these protections for all.

It’s not often that an industry asks for new laws and more regulation, but that is exactly what is needed. To keep abreast of the criminals we feel such legislation is necessary to aid prevention and deliver better customer security — and, vitally, deliver clear, unequivocal rules on reimbursement to end the refund lottery.

This week the Government announced its Online Harms Bill, setting out strict rules to hold tech companies to account for harmful content on their platforms. However, online fraud was not included within the proposals. It’s now crucial that the Government comes forward with new legislation that ensures tech companies do more to clamp down on the fraud being perpetrated on their platforms.

The finance industry is committed to tackling all forms of fraud, but only the combined efforts of every sector will truly ensure greater protection for customers and stop the scam epidemic.