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Scheme to better protect banking customers from push payment scams is delayed

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Push payment scams happen when cybercriminals trick someone into sending them money. They do this by contacting you via phone, email or social media and pretending to be someone else.

Last year push payment scams cost nearly £150million in the first six months alone.

Typical push payment scams include:

  • Sending fake invoices that look exactly like ones people are expecting (e.g. from a child's school or a legitimate tradesperson)
  • Convincing people to transfer money to someone official (e.g. such as a solicitor when buying a house)
  • Conning people to move cash into fraudulent bank accounts
  • Sending emails pretending to be from a friend asking for money.

In response, a new system which alerts anyone making a payment if the recipient's name doesn't match their bank account number is being introduced. The Confirmation of Payee system has been designed to protect banking customers from push payment scams better.

However, a UK Finance boss has told MPs that the new system will be delayed because it requires a complex change in banks' IT and processing systems.

Why are push payment scams so popular with cybercriminals?

In most cases, the push payment scam is successful because the victim believes the fraudster to be genuine. And because only account numbers and sort codes are currently used to establish where payments are being sent, the banking system makes it easy for scammers to trick people into sending them money.

However, the new system will alert customers when they are about to transfer money into the account of someone with a different name to the one they believe they are sending a payment to.

Can people get their money back after push payment scams?

Historically, banks and other organisations have avoided paying push payment scam compensation to victims. This is because the customer authorised the payments. However greater protections have now been introduced to help victims of push payment scams to secure compensation. But, to get your money back, you must be able to show that you were not to blame for the fraud.

What is happening to protect people from push payment scams?

As well as the new Confirmation of Payee system there are some other changes to be aware of. For example, in the past, you could only complain to your own bank if you were scammed into transferring money. However, you can now also complain to the bank that received your cash (the bank that the fraudster used). This rule has been introduced to encourage banks to do more to identify when cybercriminals are using their services.

If you're not happy with the response from the banks, you can also refer your complaint to the Financial Ombudsman.

The Ombudsman has highlighted the "increasing sophistication of criminals' methods". It argues that in many such scams, "people are often manipulated into thinking their money's at risk". And that this is something it will "think carefully about before deciding whether someone's acted in a way that goes beyond what might be described as careless."

However, even where you do have a claim for reimbursement, fraud victims whose banks refuse to refund their losses can see the appeal process drag on for months. In fact, the average wait for those taking their case to the Financial Ombudsman Service is a staggering 215 days.

So banking customers must remain vigilant.

How to protect yourself from push payment fraud

  • Understand that your bank (or the police etc.) will never:
    • Ask you to share any sensitive information about yourself or your accounts, like your PIN or full banking password
    • Ask you to withdraw or transfer money for safekeeping
    • Send someone to your home to collect cash, a PIN, cards or cheque books
  • Always question who you're talking to. If in any doubt call them back using trusted contact details (you can usually find these on your bank cards)
  • Be aware that scammers might have information about you such as your name, email address, phone number etc.
  • Don't be pressured or rushed into anything. A legitimate organisation would never try to panic you out of taking security checks
  • Leave the conversation if it makes you at all uncomfortable.

Reporting push payment fraud

If you have been the victim of an attempted push payment scam, you should contact Action Fraud ASAP. Action Fraud is the national fraud reporting service. However, if you have lost money as a result of the scam, you must also report it as a crime.

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 helpline 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.