Consumer group Which? is urging the UK Government to introduce a post-Brexit rule change that would force banks to reimburse victims of authorised push payment fraud.
Currently, 18 banks are signed up to a voluntary code of conduct that should see victims of bank transfer scams reimbursed.
The latest figures show that more than £200m was lost to APP fraud in the first six months of 2020. But despite the introduction of the code of conduct, just 38% was reimbursed to victims. That’s a fall on the second half of 2019, when 41% was returned.
In August, Which? published a report alleging that scam victims were facing a lottery when it came to getting their money back, with banks applying the code poorly and inconsistently. Reimbursement rates by individual banks fluctuate dramatically, with one firm fully reimbursing just one of victims, whereas another had fully reimbursed 59%. Which? believes the current lack of consistency means many customers face a lottery when it comes to trying to get their money back.
Not all banks are signed up to the code, and the Payment Systems Regulator currently lacks powers to force banks to make reimbursements under the EU's PSD2 Directive, which prohibits EU member states from pushing payment service providers to go beyond the terms set out in the legislation.
The consumer champion argues that a post-Brexit change in legislation would provide the regulator with the power to direct the Faster Payments Scheme to introduce a new guarantee into its rules that includes protection for victims of APP fraud - similar to the guarantee in place for direct debits.
In a statement, Which? says: "Which? believes that by making these changes the Government can show that it will use the legal flexibility resulting from Brexit to benefit consumers - and could potentially cut the amount consumers lose to bank transfer fraud by tens of millions of pounds a year."
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