Press and News

Banks called to back date the voluntary code of conduct

Refund all victims of bank transfer scams, say MPs The Treasury Select Committee calls for retrospective compensation for scam victims.

Victims who have lost thousands of pounds by transferring money to a fraudster since 2016 should be paid back by their bank, a damning report published by an influential committee of MPs has claimed. More than £500m has been lost to bank transfer scams – technically known as ‘authorised push payment’ fraud – since 2017. This is where you are tricked into sending money to a criminal’s bank account. In May 2019, a new voluntary code of conduct was introduced that could help reimburse victims of this crime, but only if their bank had signed up and you had lost money after the code was introduced. A dozen major banks are still to sign up to the code. But a new report published by the Treasury Select Committee has called for banks to compensate victims dating back to 2016 when Which? launched a legal challenge to regulators to tackle this crime. It has also called for the reimbursement code to be mandatory, meaning that all bank customers benefit from protection from this kind of scam, and banks who don’t introduce technology to match names and bank account details should be fined.

Call for retrospective compensation The Treasury Committee found that victims who’d been scammed prior to the code’s introduction could not be reimbursed, as retrospective compensation would have been a barrier to getting banks to sign up to a voluntary agreement. However, the report states that banks have known about this issue since 2016, when Which? Launched its complaint, and that banks had failed on its duty to protect its customers by not introducing technology to prevent this type of scam. It urged banks to reconsider refusal to reimburse earlier victims of bank transfer fraud – particularly those who were vulnerable to scams.

Article Credit: Gareth Shaw reports for which?-