Banks resist code to protect ‘push payment’ scam victims

SCAM victims whose losses are not considered “life changing” could lose out on compensation under proposals by one of Britain’s biggest banks.

The industry appeared to be resisting changes outlined in an industry consultation on a new code to ensure better protection for victims of bank transfer fraud. Santander suggested that “smaller” payments should not be eligible and that it should focus on “life changing” sums only.

The code aims to reduce the harm caused to victims of so-called “push payment” scams, which see them tricked into transferring money out of their accounts. Figures released by the industry showed that £145million was stolen in the first six months of 2018. Only £31 million had been recovered.

Under the voluntary scheme banks must agree to compensate such victims if it can be proved they failed to protect them. Lloyds Bank said it wanted to make all customers pay a levy every time they made a large bank transfer in order to pay for the scheme.

Barclays warned it needed to “limit its liabilities”, including delaying and blocking payments for genuine customers. Nationwide suggested

‘The industry is committed to ensuring that consumers are better protected from push payment scams’

customers it considered “vulnerable” to such scams may have to be barred from some banking services.

Stephen Jones, the chief executive of UK Finance, said: “The industry is committed to ensuring that consumers are better protected from the threat of push payment scams. The voluntary code is an important part of this and it is vital that we get it right.”