A MAJOR banking change could leave thousands of victims out of pocket.
A bank has warned a fraud barrier planned by the Payment Systems Regulator (PSR) may not protect all customers.
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TSB has clapped back against the PSR’s latest efforts to deter Authorised Push Payment (APP) scams.
APP scams are the biggest type of payment fraud in the UK, according to the regulator.
Its plan is to force mandatory reimbursements for all online and mobile payments over £100 – with a £35 excess fee.
Customers will need to make their claim within 13 months of any incident.
The plan can only be implemented once legislation is passed next year, but the regulator is working closely with PayPal to ensure that requirements are put in place thereafter.
Chris Hemsley, managing director at the PSR, said: “Fraudsters have continued to devastate the lives of innocent victims through APP scams.
“We want to see all banks, building societies and other payment providers doing more to prevent APP scams from occurring in the first place.
“These proposals will mean everyone has more protection from scams.”
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However, TSB has warned that a quarter (25%) of all fraud victims will not be reimbursed with this proposal.
According to them, that’s approximately 23,000 victims over a six-month period based on data from UK Finance.
This is because 52% of fraud cases that happen to 20-40-year-olds are done through social media, where the £100 threshold would be excluded from.
Social media also catches a further 17% of pensioners in fraud.
TSB says, altogether, over £5million could still be lost from UK households.
Paul Davis, director of fraud prevention at TSB said: “We welcome these moves by government and regulators to increase customer protection from Fraud.
“However, many people simply cannot afford losing £100 to fraud – especially in the current economic climate – and deserve to be protected from increasingly complex scams that often take place on social media sites.”
In response, a PSR spokesperson said: “We want people to be better protected if they are targeted by a scammer and our recent proposals aim to provide much greater and consistent levels of protection against APP fraud.
“Our proposals will place strong incentives on banks to do more to detect and prevent APP fraud in the first place.”
How to avoid scams
There are clear red flags to always keep an eye out for when you get a message you’re unsure of.
If you receive a text or email asking for personal details, you can check if it’s real by calling whoever it claims to be from – your bank, for instance, will instantly confirm if it’s fraud and advise what to do.
Any bank, trusted organisation or public bodies like councils or the police would will never ask you to withdraw, transfer or send back money from your account.
If you think you have been a victim of a scam, you should report it as soon as possible.
There is no guarantee you’ll get your money back, but banks will often compensate you if you can show you did not know the money would leave your account.
You can forward scam emails to [email protected] and should also contact your bank and report it to Action Fraud, which will give you a crime reference number.
Check if your bank is signed up to the voluntary APP code, which indicates it has pledged to reimburse customers that have been tricked into sending money to scammers.
If your bank is signed up and refuses to refund you, you can complain and ask it why it is not abiding by the code.
You may be able to report the case to the Financial Ombudsman, which could order your bank to compensate you.
