THOUSANDS of fraud victims are set to get compensation after a major rule change.
Fraud victims are set to get compensation after a major rule changeCredit: Getty
It comes after so-called Push Payment Fraud almost tripled in 2020, with £2.4billion lost to scammers.
Under current rules, banks are not obliged to reimburse customers who become victims of fraud.
But a new Financial Services Bill will now force banks to pay out.
Authorised push payment fraud is where customers are scammed into authorising a payment to a criminal.
It has become increasingly common since the pandemic, as more people shop online.
Matt Burton, chief risk officer at Quilter, branded the situation a “fraud epidemic”, with many victims being targeted through social media.
The Payment Systems Regulator (PRS) will now force banks to pay compensation to victims of fraud.
Ten banking groups including NatWest and Lloyds Banking Group have signed up to a voluntary Code, which promises to reimburse scam victims.
Laura Suter, head of personal finance at AJ Bell, said: “The new Financial Services Bill will pave the way for the Payment Systems Regulator to force banks to compensate victims, with a mandatory reimbursement for anyone who is tricked into transferring their money to a fraudster.”
But not everyone is guaranteed their money back.
Fraud victims who made transactions through banks not signed up to the code are less likely to receive compensation, the Government warned.
Last year, just 43p of every £1 stolen was returned to victims.
The regulator will now come up with a criteria detailing who will be reimbursed – and who will not.
Suter added: “What’s certain to happen now is that banks will beef up their checks and processes when anyone makes an online transfer, if they are going to be the ones footing the bill for more of the fraud.”
What are my rights if I’m scammed?
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 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.
Meanwhile, major planning laws that could see your neighbours veto your extension were also revealed in the Queen’s Speech.
And the Government hinted there could be more energy help on the way as it promised the cost of living crisis was a top priority.
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