11 October 2023 , 14:05
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Scam victims could be charged an excess as high as £250 to have the money they lost refunded back to them Which? has warned.
The consumer group Which? published an article today that claims the plans against legal protection for victims of bank transfer scams have taken a "major step back" after new proposals were shared.
The Payment Systems Regulator (PSR) has recently put forward a new set of proposals in relation to protection for people who fall victim to Authorised Push Payment (APP) scams. These scams happen when someone is tricked into sending money to a fraudster posing as a genuine payee. This type of scam has quickly become one of the most "significant" types of fraud accounting for nearly £500million in losses last year.
In a recent round of proposals, the PSR has suggested introducing a fee for victims when they make a claim. Under the current voluntary code, banks that have signed up have to take a number of steps to protect customers and reimburse those who aren't to blame for the scam.
The PSR has suggested that victims of this type of fraud pay an excess of £100 or even up to £250 to use the service as a way to encourage people to be "more cautious" Which? has claimed. Those who are considered vulnerable would be exempt from the fee.
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Industry data however shows that 32% of APP fraud is below £100 this would mean an excess of £100 would exclude around a third of all APP claims.
The consumer group has recommended that the plans for an excess be scrapped as it is "not justified by the evidence and risks disproportionately affecting lower-income groups."
Which? added: "An excess would create a significant gap in efforts to collect data about fraud – since customers may be less likely to report fraud below the excess level if they know their banks aren’t obliged to reimburse them – and firms would not be incentivised to tackle scams below this threshold, putting customers at risk."
The PSR has confirmed that a new redress system for victims tricked into transferring money to scammers is due to come into force next year. Under the new rules from the PSR, banks and building societies will need to reimburse the victim for the amount lost to this type of scam within five business days.
The new rules will cover scams done through Faster Payments – the payment system across which around 90% of APP fraud currently takes place.
The PSR has not confirmed an official date for when the new rules will be put in place. However the recent proposals have pushed back the potential launch by six months until October 2024.
In a letter to the PSR today, Which? said it was "deeply disappointed" by this and other recent proposals. Other organisations who signed this letter included Age UK, Victim Support, and the National Trading Standards Scams Team.