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Banks to pay push payment scam compensation

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A number of leading banks have agreed to contribute to a fund for victims of push payment scams.

Push payment scams happen when cybercriminals trick someone into sending them money by pretending to be someone else. Push payment scams saw £148 million lost in the first half of 2018.

Banks that have signed up to the new push payment scam compensation fund include Barclays, HSBC, Lloyds and RBS. Other banks such as Santander and Nationwide, have also made a similar commitment.

Historically, banks have avoided paying push payment scam compensation to victims unless there was a fault in their processes. This is because the customer authorised the payments.

The scheme will be introduced as an interim measure until a permanent solution can be agreed. It is expected that banks will reimburse somewhere between £30million and £40million more in push payment compensation in 2019 as compared to last year.

How to protect yourself from push payment fraud

Action Fraud - the national fraud reporting service - recommends taking the following advice to stay safe:

  • Be suspicious of requests to transfer money by bank transfer or virtual currency instead of safer methods (e.g. credit card or payment services such as PayPal)
  • Trust your instincts. If something feels wrong then it is right to question it
  • Don't pay for goods or services unless you know and trust the individual or business
  • Be aware that personal information obtained from data breaches is making it easier for cybercriminals to create highly targeted phishing messages and calls
  • Don't assume a person/organisation is genuine just because they're able to provide some basic details about you
  • Always be suspicious of unsolicited requests for your personal or financial information.

Also, it's important to understand that your bank would not:

  • Ask you to share any sensitive information about yourself or your accounts, like your PIN or full banking password
  • Ask you withdraw or transfer money for safekeeping
  • Send someone to your home to collect cash, a PIN, cards or cheque books
  • Try to panic you out of taking security checks.

A win for consumers

Commenting on the new push payment scam compensation fund, a spokesperson at consumer group Which?, said: "This long-awaited move to ensure victims of bank transfer scams are properly reimbursed when neither they nor the bank is at fault is a major victory for consumers.

"The banks must now act to ensure this scheme is implemented swiftly so consumers can have confidence that losing life-changing sums of money to this type of fraud is a thing of the past."

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 give us a call our office 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 - minimising 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.