I welcome the news that eight banks and building societies (PSPs) have signed up to a new voluntary code (the Code) designed to tackle authorised push payment (APP) scams which will offer increased protection to their customers from fraud and the use of stolen money by criminal gangs. Customers will now receive full reimbursement if they have been a victim of a scam, provided they have met the minimum standards of care expected.
Our group has met with UK Finance and banks to ask them to do more to tackle fraud. When a business is repeatedly a victim of fraud it is only right that banks and payment service providers have systems in place to reduce scams and protect consumers. Scammers are forever becoming more creative and businesses need to operate within a system that they can trust. The APPG on Fair Business Banking, which I chair, has made calls for properly resourced regional fraud squads to fight business banking fraud and has worked to ensure fraud victims are compensated. One of my constituents, for example, was fully compensated after a phone phishing scam thanks to our intervention; the bank agreed to pay losses in full.
APP fraud occurs when consumers are tricked into making a payment to an account that they believe belongs to a legitimate beneficiary but is, in fact, controlled by a fraudster. This can be carried out either by phone or online, or in person. This money is often transferred quickly to another account making it difficult to trace. Losses due to APP fraud totalled £228.4 million in 2018, stolen from over 78,000 victims. Cases of online fraud and phone fraud increased by 19 per cent in just one year.
The Code includes educating customers; identifying customers most a risk of being scammed; providing effective warnings to customers who identify an APP scam risk and delaying or stopping payments which might be part of a scam; acting quickly if a scam is reported and stopping fraudsters opening bank accounts. It is the culmination of almost a year’s work between PSPs and consumer groups led by the APP Scams Steering Group. Eight PSPs (Barclays, HSBC, Lloyds, Metro, Nationwide, RBS, Santander and Starling), representing 17 consumer brands and over 85 per cent of authorised push payments, have signed up to the code. More are expected to sign up in the coming weeks.