Which? has warned that unless Pay.UK, the payments authority, backs the scams reimbursement funding proposal we could go back to seeing blameless fraud victims losing their life savings.

In a joint letter, Which? and UK Finance, acting on behalf of seven providers, call for Pay.UK to approve a plan that would ensure bank transfer fraud victims get their money back in a ‘no blame scenario’. This is when both they and their payment service provider has done everything expected of them. The proposals also cover vulnerable customers, ensuring their losses are covered.

Which? says it’s now up to Pay.UK to decide whether the proposal is agreed. It warns that if it isn’t,  blameless scam victims could be left unprotected from 1 January as the current interim funding model expires on 31 December 2019.

What are Which?’s proposals?

Which? is proposing that banks pay a small fee on some transfers to collectively fund a ‘no-blame’ reimbursement pot. The idea was agreed and submitted following months of talks involving banks and consumer representatives.

Authorised push payment fraud is a type of fraud in which victims are manipulated into making real-time payments to fraudsters, typically by social engineering attacks involving impersonation of banks or other institutions. Losses to authorised push payment (APP) scams rose to £147m in the first six months of this year.

In the letter, Which? chief executive Anabel Hoult and Stephen Jones, chief executive of UK Finance, warn: “Authorised Push Payment (APP) fraud is a crime which can have a devastating impact on its victims, which is why protecting consumers is a priority for us all. If the Pay.UK board fails to pass the change request, many victims of APP scams could once again risk losing their life savings to this devastating crime.”

Which? first highlighted the devastating impact of bank transfer fraud in a super-complaint three years ago. A voluntary banking industry code was introduced in May following joint work between the industry and consumer groups.

Since then, the UK’s biggest banks have taken on the burden of funding reimbursement for victims in the ‘no-blame’ scenario. But this arrangement is due to run out at the end of the year.

Anabel Hoult, chief executive at Which?, said: “Great strides have been made towards offering consumers greater protection against bank transfer scams – and we believe this proposal is the best way of ensuring blameless fraud victims will continue to be reimbursed.

“Time is running out to agree a solution, so we urge Pay.UK to accept this important proposal – as it is unthinkable that we could see a return to the dark days of blameless victims losing their life savings to this devastating crime.”

Pay.UK said it recognised “the devastating effect of authorised push payment fraud on innocent victims”. It said it had recently run a “call for information” on the proposed rule changes. This closed on 1 October and Pay.UK said it was currently analysing the evidence provided in the submissions.