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Banks told to combat payment scams | Banks told to combat payment scams |
(35 minutes later) | |
Banks must do more to tackle scams where people are tricked into transferring money to a fraudster, the regulator has said. | Banks must do more to tackle scams where people are tricked into transferring money to a fraudster, the regulator has said. |
The Payments Systems Regulator (PSR) was responding to a "super complaint" from consumer group Which?. | The Payments Systems Regulator (PSR) was responding to a "super complaint" from consumer group Which?. |
This complaint highlighted the problem of "push" fraud whereby victims are conned into paying the wrong person. | This complaint highlighted the problem of "push" fraud whereby victims are conned into paying the wrong person. |
However, the PSR stopped short of recommending that banks should be forced to compensate customers. | However, the PSR stopped short of recommending that banks should be forced to compensate customers. |
In response, Which? said that banks had been let off the hook, and they would have little incentive to protect account-holders. | |
It had wanted banks to refund consumers in cases where customers accidentally transferred money to a fraudster, similar to the protections provided on credit card transactions. | |
At the moment banks pay up in about a third of such cases. But mostly they do not admit liability, leaving consumers out of pocket. | At the moment banks pay up in about a third of such cases. But mostly they do not admit liability, leaving consumers out of pocket. |
Such transfers work instantly, and cannot be recalled. | Such transfers work instantly, and cannot be recalled. |
In one example highlighted by Which?, Christopher Mills, from York, was tricked into paying a £10,000 house deposit to a fraudster who posed as his estate agent. | In one example highlighted by Which?, Christopher Mills, from York, was tricked into paying a £10,000 house deposit to a fraudster who posed as his estate agent. |
The bank refused to cover the loss. | The bank refused to cover the loss. |
"Tens of thousands of people have, combined, lost hundreds of millions of pounds to these scams," said Hannah Nixon, the PSR's managing director. | "Tens of thousands of people have, combined, lost hundreds of millions of pounds to these scams," said Hannah Nixon, the PSR's managing director. |
"We need a concerted and co-ordinated industry-wide approach to better protect consumers, and we need it to start today." | "We need a concerted and co-ordinated industry-wide approach to better protect consumers, and we need it to start today." |
'Growing problem' | 'Growing problem' |
The regulator said banks needed to work together to help detect this type of fraud, adding they could do more to identify potentially fraudulent payments. | The regulator said banks needed to work together to help detect this type of fraud, adding they could do more to identify potentially fraudulent payments. |
It is recommending that: | It is recommending that: |
However Which? accused the regulator of letting banks off the hook. | |
"The outcome for people is unfortunately that they will continue to be scammed out of millions of pounds," said Alex Neill, managing director of Which? home and legal services. | |
"We need to see swift action and not see this kicked into the long grass." | |
How to protect yourself against "push" fraud | |
When you transfer money from your bank account, you are asked to enter three pieces of information: The name of the payee, their account number, and the sort code. However only the last two are cross-checked by the bank. So putting in the correct name is no guarantee that person will get the money. | |
Financial Fraud Action UK offers the following advice: | |
The PSR has already proposed a series of improvements, such as "confirmation of payee", which would enhance payment security. | The PSR has already proposed a series of improvements, such as "confirmation of payee", which would enhance payment security. |
However, such changes are not due to take effect for several years. | However, such changes are not due to take effect for several years. |