Hope at last for bank transfer fraud victims

Victims of bank transfer fraud could be one step closer to guaranteed reimbursement after the payments regulator this week met for the first time with financial representatives from banks, consumer groups and charities to discuss an official redress scheme.

Under the current rules, banks or building societies are not obliged to refund individuals or businesses who are tricked into sending money to criminals, who often pose as police, banks and other trusted authorities. These are known as authorised push payment (APP) scams.

Telegraph Money has consistently highlighted the way banks are able to avoid being held to account for enabling this type of crime.

The victim’s bank will claim it followed payment instructions for these authorised transactions, and the fraudster’s bank can refuse to take responsibility for giving a criminal an account.

The Payment Systems Regulator (PSR) is consulting with a steering group, which includes industry body UK Finance, consumer lobby organisation Which?, charity Age UK and representatives from banks, such as Barclays and Lloyds. The purpose is to develop a reimbursement scheme for victims of bank transfer fraud.

The consultation will be ongoing until September. During this time they will develop a plan of “appropriate outcomes” for the “different situations” that can be encountered in APP scams.

For example, the steering group will lay out scenarios when one party is responsible, when hen there is no blame, and when both oth parties have not met the required red standards.

Refunds may depend d on whether the banks had “met the expected standard of care” and victims ictims “had taken a requisite level of care”, the PSR said in its consultation tion notes in February.

Bank transfer fraud is s one of the fastest-growing crimes in the country, and the losses can be life changing. According to UK Finance, there were 43,875 cases of APP scams reported in 2017. Losses added up to a staggering £236m and just 26pc was recovered.

As losses mount, plans for a formal redress scheme are finally on the table, writes Amelia Murray

Telegraph Money has long called for banks to shoulder more responsibility for the role they play in APP scams.

Our ongoing campaign has highlighted weak procedures for opening accounts, inconsistent approaches to victims of fraud, and individuals stuck in the middle of banks’ conflicting processes.

Some victims have also reported fraud departments that are “unavailable” out of working hours.

It is too easy for banks to place the responsibility on individuals despite scams getting more sophisticated.

In 2017, victims of APP scams lost £236m. Just 26pc was recovered

Telegraph Money continues to call for the following:

More consistency between all providers.

For example, TSB refunded Telegraph Money reader Dave Burton the £3,400 he lost to an eBay fraudster for a non-existent motorhome, following pressure from this newspaper, because his police report suggested the account was opened with fake details.

But Nationwide refused to do the same for Balazs Kelemen when he was tricked by a similar scam.

This is despite police confirming a false Romanian ID card and counterfeit British Gas utility bill had been used to open the Nationwide account Mr Kelemen transferred £8,700 into.

Proof of proper pro checks.

Banks that provide accounts accoun to fraudsters should be able to demonstrate dem that proper checks are carr carried out. If criminals are still able to t open accounts then rules shouldsho be tightened. More investment into fraud prevention and detection systems. If banks were responsible respon for reimbursing victims victim of APP scams, as they are for f debit and credit card fraud, frau they might be incentivised ince to stop it.

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