Plans on way to protect people from payment scams confirmed

People have lost millions of pounds through high pressure scams
People have lost millions of pounds through high pressure scams

People tricked into transferring money directly to a fraudster should have stronger protections under plans from a regulator.

The Payment Systems Regulator (PSR) has been looking into how best to protect people from authorised push payment (APP) scams.

It follows a “super complaint” from consumer group Which? over concerns that, unlike many other payment methods, victims conned into transferring money by bank transfer to a fraudster have no legal right to get their money back from their bank.

The PSR previously set out an action plan in December 2016.

In an update on Wednesday, it said an industry code will be in place from September, paving the way for victims of such scams to have better protection.

The Financial Ombudsman Service (FOS) will be able to take the code into account when dealing with new complaints about these scams.

From September, the code will be publicly consulted on to be refined in early 2019 and the regulator expects that it will continue to evolve to ensure measures are kept up to date.

It said that, for victims of APP scams, this means they can be confident any claim for reimbursement will be given fairer consideration.

The PSR will also set up a steering group to prevent the scams happening and reduce their impact if they do happen.

Paul Smith, head of policy at the PSR, said: “The banks have already made some changes but, from September 2018, this industry code will see better protections available to everyone.”

Which? previously said that in the first two weeks after launching an online scams reporting tool, more than 650 people told it about losing over £5.5m in total to bank transfer scams.