LONDON (Reuters) – People tricked into authorising payments to fraudsters will be able to claim compensation more easily from their banks under a new industry code, a British financial watchdog said on Wednesday.
The Payment Systems Regulator (PSR) said an interim code will be introduced in September to give consumers better protection from so-called push-payment scams.
This type of fraud totalled more than 100 million pounds in the first half of last year, affecting more than 19,000 people with an average loss of 3,000 pounds per case, UK Finance, a banking industry body, has said.
Banks have been reluctant to compensate an account holder for authorising a payment by phone or online to fraudsters that pretend to be a legitimate company.
Victims of the scams can be confident any claim for reimbursement will be given fairer consideration, the PSR said.
“The banks have already made some changes but, from September 2018, this industry code will see better protections available to everyone,” Paul Smith, PSR head of policy said in a statement.
A new industry steering group will refine the code by early 2019 to set out the circumstances when a bank or other firm that offers payment services, is responsible for compensating a push-payment fraud, the PSR said.
MPs have been calling for better protection of consumers from push-payment scams.
“An industry code which clearly sets outs when payment services providers are responsible for reimbursing victims is a positive step,” Nicky Morgan, chair of parliament’s Treasury Select Committee, said.
“The committee will continue to scrutinise the PSR’s work to ensure that the final code for the reimbursement model is sufficient,” Morgan said.
Reporting by Huw Jones, editing by David Evans