Thousands of people who fall victim to scams are to receive new protection after a number of the UK’s biggest banks agreed to introduce a new code.
The code will give people better protection against authorised push payment scams, where victims are tricked into transferring around £354million a year, thinking they are paying a bank, a business or even HM Revenue and Customs.
Last year over 84,000 bank customers lost money after being duped by financial scams, sometimes amounting to tens of thousands of pounds. However, only a fraction of the amount lost was refunded by banks.
The new code should mean more people will be reimbursed, with the refunds coming from a central pot in circumstances when neither the customer nor the bank is to blame.
The banking industry has committed to providing initial funding to immediately reimburse customers for these no blame situations until the end of 2019.
The initial funding is intended to provide time for the banking industry to work alongside regulators and the Government to deliver sustainable funds to cover these reimbursements by January 2020.
The providers that have committed to the code include seven of the UK’s largest banking groups: Barclays, Lloyds Banking Group, HSBC, Metro Bank, Royal Bank of Scotland, NatWest, Santander and Nationwide.
Chris Hemsley, co-managing director of the Payment Systems Regulator, said: “APP scams can have a devastating impact on the people who fall victim to them.
“The code is a major step up in protections and it reflects our strong beliefs that if somebody has done everything they can reasonably do in order to protect themselves, they should be reimbursed.
“We welcome the commitment that these banks have made to their customers.”