A recent report from Which? has revealed that the vast majority of British consumers are still at risk of payment scams relating to bank transfers. A dozen of the 27 leading banks and building societies based throughout the UK are yet to sign up to new voluntary standards. The code, which has been active since May, is designed to make it easier for victims of authorized push payment (APP) fraud to retrieve their hard-earned money.
Stephen Jones, CEO of UK Finance said at the launch of the APP Scams Voluntary Code that safeguarding British customers from fraud and “preventing stolen money from going to criminals” was a “core priority” for the finance industry as a whole. Jones and UK Finance confirmed that despite the fact that almost half of all leading British banks and building societies have yet to sign up to the code, payment service providers representing over 85% of all APPs have put their names to the new standards.
According to Which? as of 1st July 2019, nine leading banks are in the process of becoming a signatory of the APP Scams Voluntary Code. These include Citibank, Monzo, Tesco Bank, Co-op Bank and Virgin Money. The latter is responsible for 3.3% of all mortgage lending in the UK, according to Trussle’s recent review of Virgin Money mortgage products. Virgin Money is also in the process of completing a merger with both Clydesdale Bank and Yorkshire Bank in a bid to create a strong challenger bank to the leading high-street contingent. An additional three banks, Danske Bank, N26 and First Trust Bank, are still investigating and weighing up the prospect of becoming a signatory.
APP fraud is particularly prevalent in the 24/7 online world today. It’s most common when online consumers are conned into sending their hard-earned funds directly into the hands of a cyber-criminal that makes it appear to consumers they are making a payment to a legitimate business. In years gone by, banks have not been legally obliged to refund money to victims of APP fraud. That’s because banks have previously cited personal negligence due to consumers having authorized their bank to process the transaction.
However, those banks that have signed up to the APP Scams Voluntary Code will now be duty-bound to reimburse their customers, providing the customer did all that’s expected of them under the new code. TSB unveiled its own exclusive commitment to its victims of online bank transfer fraud earlier this year. Although it’s a guarantee that many believe is designed to appease those TSB customers that were left locked out of their bank accounts for many days last year, it’s still an encouraging development for other banks to follow.
According to Which? more than $500 a minute is being lost to APP fraud – money that is affecting the lives of many for all the wrong reasons.
A spokesman for UK Finance said that the new voluntary APP fraud code was a “significant moment” in the finance industry. They added that customers can help ensure they do everything possible to “stay safe from fraud” by taking heed of the “Take Five To Stop Fraud” campaign” and to always “question any uninvited approaches” for payments and bank transfers.