Banks try to limit their liability for push payment compensation
Push payment scams happen when cybercriminals trick someone into sending them money by pretending to be someone else. Some victims have been conned into transferring hundreds of thousands of pounds to criminals. In the first half of 2018 alone, such scams saw £145 million stolen by cybercriminals. And, until now, there was little victims could do to secure push payment compensation.
Find out more about push payment fraud.
In response, the industry is looking at a new compensation scheme.
But, responding to a consultation on the introduction of a new code - which could force banks to pay millions of pounds in compensation each year - it seems like the banks are trying to limit their liability for push payment compensation.
- Santander has proposed that victims whose losses are not considered to be "life-changing" should receive nothing. The bank argues that "smaller" payments of a few hundred pounds should not be eligible for compensation
- Lloyds has proposed that customers should pay an extra levy every time they make a significant bank transfer to help fund the compensation scheme
- Barclays has warned that to limit its liabilities for push payment compensation it might need to slow down and block payments for genuine customers
- Nationwide has suggested that customers it identifies as vulnerable may be barred from some banking services as they present too much of a risk of getting scammed.
What would the new code do?
Under the new scheme, banks would agree to compensate fraud victims for losses if it can be proved that they failed to protect them. Historically, banks have avoided paying push payment scam compensation to victims unless there was a fault in their processes. This is because the customers authorised the fraudulent payments.
However, some banks have already signed up to a new push payment scam compensation fund which has been introduced as an interim measure until a permanent solution can be agreed.
What can you do if you are the victim of push payment fraud?
If you have been the victim of an attempted push payment scam, you should contact Action Fraud. However, if you have lost money as a result of the scam, you must also report it as a crime. You should also notify your bank ASAP.
At Hayes Connor Solicitors, we want to reduce the number of data violations and successful cyber scams taking place across the UK. To do this, we are raising awareness of this issue and educating people to help stop fraudsters in their tracks.For more advice on how to keep safe, follow us on Twitter and Facebook.
Alternatively, if you have been the victim of a push payment scam, find out how we can help you to recover any losses. Or contact us to discuss your case in more depth. We can help you to claim compensation and steer you through the aftermath of a bank or credit card scam. Ultimately we minimise the impact on you as much as possible.
We are also considering agroup action claimagainst banks who have failed their clients after they have lost money through no fault of their own. A group action is where a group of people, all affected by the same issue, collectively bring their cases to court. Group actions can be a powerful tool and can have a bigger impact than a single claim.
We can also help you if you became the victim of a bank scam as a direct result of a data breach.