PSR has proposed UK banks reimburse customers who lose money to APP (Authorized Push Payments ) scammers. Although customers need to be extremely cautious when sending payments, the proposed measures will provide added protection ensuring that large payments will have automatic protection.
In a statement, the PSR said that the reimbursement/refund bill will be split into two: the bank from which the money was sent and the bank of the scammer. They further added that the customers will be subject to processing fees of at most 35 pounds.
PSR’s New Rule
PSR says that in 2021, bank customers lost up to 583 million pounds in APP Scams which was a 39% increase as compared to the previous year. With such an alarming rise in fraud, the PSR is looking forward to curbing the situation by introducing the new reimbursement rule.
PSR anticipates introducing the new rule after the parliament expands its powers. This is expected in the first half of 2023 when the new reimbursement rule will be implemented the same year or during 2024 in case of any delay.
Two of the most impactful measures of this rule are; the move to refund scammed customers within two days and the splitting of the reimbursement funds between the banks of the scammer and the victim. According to the EY consultants, the 48 hours reimbursement period will significantly lower the cases of banks refusing to refund scammed customers.
UK Banks In The Process of Refunding Customers
According to current statistics, 46% of customers who fall victim to APP scams get refunded. The refunds largely fall on the sending banks. With the new rule splitting the refund between the sending and the receiving banks, the PSR is anticipating a rise to over 95% of refunds.
HSBC (HSBA.L), Virgin Money (VMUK.L), Natwest Group (NWG.L), Banco Santander (SAN.MC), and Barclays (BARC.L) are some of the banks that will be affected by the new rule. Following the new PSR rule, most banks have already agreed to initiate the process of checking the names of individuals receiving payments via a bank transfer. PSR anticipates rolling this move more widely to implement it in all the UK banks.
Why Does It Take Long To Get Through To the Fraud Department – UK BANKS?
According to several individuals who have fallen victim to APP Scams, it took ages for them to repost the cases – most of them attesting to the fact that they were on hold by fraud departments.
UK Finance Trade Body acknowledges the fact that most banks have helplines that allow victims to report cases of fraud. According to their understanding, the average call waiting times for the helplines are low, and insist that customers who realize that they have been scammed should immediately call up.
Recently, two helplines have been launched to offer help to customers who fall victim to APP fraud. One if from Nationwide for its customers and the other is from a group of banks and telecommunication companies. In this case, customers can call 159 to get through. The bottom line is to ensure that a payment request is legit before initializing the payment transfer.
Conclusion
For the past months, customers have consistently lost their bank funds through APP Scams. As an initiative to conquer the fraud epidemic, the PSR has introduced a new rule for banks to refund funds to customers who fall victim and lose amounts over 100 pounds. With the PSR introducing the new rule in the first half of 2023, bank customers are breathing a sigh of relief.
In a nutshell, the rule involves two impactful measures:
- Refunding victims of payment fraud within two days (48 hours)
- The splitting of refunds between the sending and receiving banks
