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Bank transfer scam victims could be reunited with their cash sooner

Written by: Paloma Kubiak
People who are duped into sending money to a fraudster via a bank transfer could get their money back more easily under plans laid out to tackle the growing issue.

In the first six months of this year, duped customers sent more than £100m to criminals after falling victim to the Authorised Push Payment (APP) scam.

These scams are often performed through invoices, house purchase scams and email hacks to target people into authorising a payment via a bank transfer.

Often when people realise they’ve been scammed, it’s too late as the funds have been withdrawn and under current legislation, consumers have no legal protection to cover them for losses if they authorised the payment.

As such, industry data reveals there were 19,370 cases of this type in the first six months of 2017, with 88% made up of consumers losing an average of £3,000 while the remaining number were businesses losing an average £21,500 per case.

Campaign group Which? launched a super-complaint in September last year urging the industry to better protect consumers; for banks to shoulder more responsibility for money lost to scams made by bank transfer and for the Payment System Regulator (PSR) to formally investigate the scale of this fraud.

Today the PSR and trade body UK Finance have published a range of measures, due to come into effect next year, to better protect consumers and help them get their money back sooner.

This includes the repatriation of funds – looking at how to freeze and seize stolen money and return it to victims. Statistics show financial providers were able to return £25.2m of the losses in the first half of 2017.

The industry will also look at longer-term innovations to help people identify exactly who they are dealing with, such as through a system to verify payee name details before a payment is made, as well as making it harder for fraudsters to open accounts to use for scams, and giving providers powers to shut down mule accounts.

Hannah Nixon, managing director of the PSR, said: “There are now a broad range of initiatives that will make it harder for criminals to commit APP scams. Cumulatively all of these new measures will make a positive difference to those who fall victim to APP scams, will help to prevent APP scams from happening in the first place, and help ensure banks adhere to the best practice standards they’ve agreed to.”


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