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New Sherif In Town To Help 'Bank Fraud' Victims!
Figures show that during the first half of 2017, more than 19,000 people fell victim to ‘bank transfer’ and ‘authorised push payment’ scams. The total amount of money lost is staggering, estimated to be in excess of £100m.

Due to a ‘super-complaint’, a facility is being put in place to help compensate some of the victims of these scams.



  • Over £100m was stolen in the first half of 2017, due to ‘bank transfer’ and ‘authorised push payment’ scams.
  • Victims of these scams currently have no legal right to be reimbursed by their bank for the money they have lost.
  • The Payment Systems Regulator (PSR) have put plans in place for a ‘contingent reimbursement model’ which should see victims, in certain circumstances, receive compensation for the money they have lost.
  • The new model should be in place by the end of September 2018.
  • Other schemes have also been proposed to try and prevent the scams from the first instance.
  • Unfortunately, it is impossible for everyone to be protected.
  • Consumers will still need to remain vigilant and actively make an effort to protect themselves.


What is a Bank Transfer/ Push Payment Scam?

These types of scams happen when consumers are tricked into authorising a transfer of money from their bank account into, what they believe to be, a legitimate payee’s account. This ‘payee’ account is actually controlled by a fraudster and they will contact you, normally via text message, and claim to be from your bank saying that you need to make a money transfer. This type of scam is an ever-growing problem with no one way of making it stop.


What Is Being Done?

In September last year, The Payment Systems Regulator (PSR) received a ‘super-complaint’ from consumer group ‘Which?’, with concerns that victims of these scams have no legal right to have their money reimbursed from their bank. They do not receive sufficient protection from fraudsters, in comparison to other types of payments, such as directs debits and credit/debit card payments. Since the complaint, the PSR have been working with the banking industry and The Financial Conduct Authority (FCA) to combat the issue and make a positive change.

The PSR have stated that plans for a ‘contingent reimbursement model’ are in place which should see, in certain circumstances, victims receiving compensation for the money lost. They are currently gathering information and feedback, believing that the model should be implemented by the end of September 2018.

They have also been working together with the payments industry to develop a range of schemes, some examples are; a confirmation of payee, transaction data analytics, and sharing financial crime information and data. These together should help to prevent the scams happening the first place, aid in a faster response if they do happen, and help to recover any money lost.

The PCA has discovered the way in which payment service providers (PSP) handle ‘authorised push payment’ and ‘bank transfer’ scams. They have found that their methods are inconsistent, any existing fraud detecting systems don’t easily pick up on these types of scams, and they are not collecting enough transaction data. The FCA believe that the schemes they have proposed will help to combat these issues.


What Happens Next?

The PSR have stated that there is no “silver bullet” for these scams, meaning it is impossible for everyone to be protected. Even when the new system is in place, unfortunately, “some people will still lose out”.

In order for the new model to be successful, it must be pragmatic. Consumers will still need to be vigilant, and actively make an effort to protect themselves. Banks and payment service providers should also be upholding best practice, and in cases where this doesn’t happen, reimbursement should be provided. 


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