Banks oppose mandatory refunds for scam victims as policies ‘make people less careful about where they send their money’ – as consumer advocates accuse lenders of ‘victim blaming’
Banks oppose mandatory refunds for all scam victims, saying this will encourage people to be ‘less careful’ where they send their money.
UK Finance, which represents 300 companies in the banking and finance sector, including Barclays, HSBC, Lloyds and NatWest, says automatic refunds to victims ‘remove the incentive for customers to take sensible steps to reduce the risk of fraud’ .
But the excuse was dismissed as “victim blaming” by consumer champions yesterday.
Rules being considered by the Payment Systems Regulator (PSR) would require banks and building societies to fully reimburse victims of authorized push payments (APP) fraud when the loss exceeds £100. APP fraud is when a victim is tricked into sending money to a fraudster posing as a real beneficiary.
Scammers often pose as a bank employee or other trusted organization, have details about their victim and convince them to transfer money to a ‘safe’ account. The Daily Mail has long called for more protection against bank fraud through its Stop The Scammers campaign. Around 196,000 people lost £583 million to APP scams in 2021, according to UK Finance.
UK Finance says automatic refunds to victims ‘remove the incentive for customers to take sensible steps to reduce the risk of fraud’. But the excuse was dismissed as “victim blaming” by consumer champions yesterday. File image
It comes as the Commons Treasury committee warns today that regulators must “put on their skates” and agree on the details of repayment proposals as fraud rates rise. MP Harriett Baldwin, chair of the committee, said: ‘Our committee will keep up the pressure so that implementation is not half-baked.’
But UK Finance members appear to oppose the PSR’s plans, saying mandatory repayment could ‘incentivize consumers to take appropriate steps to protect themselves against APP scams’. Rocio Concha, director of policy and advocacy at Which?, said: ‘It is disappointing that some parts of the banking sector are resisting vital reforms and are choosing to continue blaming victims.
“The government and PSR must quickly implement a system that will allow the vast majority of APP fraud victims to get their money back.”