New fraud protection scheme launches: are you covered?

A new scheme that launched on 28th May 2019 is set to ensure victims are protected from APP (Authorised Push Payment) fraudsters. The scheme, led by the Payment Systems Regulator (PSR) is designed to not only prevent the scams from occurring in the first place but also to better protect those who fall victim.

What is Authorised Push Payment fraud?

Authorised Push Payment (APP) fraud is when a fraudster will attempt to get you to send money to them, often pretending to be the police, your bank or a bill provider. Fraudsters will often target victims using realistic-looking emails, telephone calls or through social media accounts.

Prior to the scheme launching, the process of reporting APP fraud was complex with little chance of ever receiving compensation. That is all set to change thanks to the implementation of a new voluntary code.

How will the new scheme work?

Under the new scheme, consumers are more likely to get their money back as banks have committed to do more for customers. By signing up to the code, banks have agreed to follow new criteria to reimburse the customer. If the bank believes the customer has been a genuine victim of APP fraud it will issue a refund within 15 working days of the scam or 35 working days if the case is complex. Prior to this scheme, banks generally only reimbursed those that highlighted an obvious fault with the banks' handling of the transaction. As a result, up to £354m was lost by consumers and businesses in 2018. From that, only £83m was refunded.

To find out if your bank has signed up to the voluntary scheme, click to jump to the section 'Which banks are in the scheme?'

Chris Hemsley, Co-Managing Director of the PSR said:

“APP scams can have a devastating impact on the people who fall victim to them. The code is a major step-up in protections and it reflects our strong belief that if somebody has done everything they can reasonably do to protect themselves, they should be reimbursed. I welcome the commitment that these banks have made to their customers.

“There has been a significant amount of work by consumer groups and the industry to develop and deliver this code and we are really pleased that these new protections are now available.”

A refund is not guaranteed however and banks reserve the right to refuse a refund if they feel the customer has been negligent when transferring money from their bank account. You could be refused a refund if:

• You have been a victim of this type of fraud before
• You have not taken notice of warnings about scams when setting up or amending current payees on your account
• You have ignored fraud warnings when making a payment
• You haven't taken the time to check the person in receipt of the money is legitimate
• You have been 'grossly negligent'
• You're a small business or charity and haven't followed the correct procedures when making a payment
• You have been dishonest when reporting the scam

Banks who have committed to the voluntary code now have specific requirements to follow and are required to run their own campaigns to ensure that consumers aware of the dangers of APP fraud, including how to protect themselves from online fraudsters.

What can I do if I have been scammed?

If you have fallen victim to APP fraud you will need to notify your bank as soon as possible. The bank will evaluate your case and decide whether or not to reimburse you. If you are not satisfied with how the bank has dealt with your claim you can report it to the Financial Ombudsman Service.

In addition to reporting the fraud to your bank, it is important to report it to Action Fraud either online or via telephone by calling 0300 123 2040 (lines are open Monday to Friday 8am - 8pm - If you are calling from abroad call +44 300 123 2040).

Which banks have committed to the voluntary code of practice for automated push payment (APP) scams

8 banks (representing 17 bank brands) have signed up to the code:

• Barclays
• HSBC (including First Direct & M&S Bank)
• Lloyds Banking Group (including Lloyds Bank, Halifax, Bank of Scotland and Intelligent Finance)
• Metro Bank
• Nationwide
• RBS (including Natwest and Ulster Bank)
• Santander (including Cahoot and Carter Allen)
• Starling Bank

On 28th May Monzo announced that they were signing up to the scheme by tweeting:

If you bank with TSB you will notice that it is not listed above, however, TSB recently announced its own refund guarantee. To find out more read our article, 'TSB fraud refund guarantee - are you covered and how to claim'.

How can I protect myself from online fraud?

With online and telephone fraud growing and scams becoming more advanced it is important to be vigilant. Remember that banks and authorities will never:

• Ask for personal details such as PIN numbers or full bank details and passwords
• Ask you to move money from one account into another
• Ask you to provide personal information over the telephone

To stay protected from fraudsters you should always:

• Question who you are talking to. If you are still unsure, call the company back, ideally from another phone.
• Don't feel pressured or forced into sending money; a genuine business wouldn't put you under unnecessary pressure.
• Keep your computer up to date with the latest anti-virus software
• Don't click on any suspicious links in emails or text messages
• Sign up to extra protection when shopping online, such as verified by Visa or MasterCard Secure Code
• Regularly check your credit score for any signs of fraud
• Shred papers and letters that contain personal details
• Check for the padlock symbol at the top of the webpage URL and that the webpage starts with https://
• Enable the security settings on your home WiFi
• Avoid accessing your bank account from a public computer or unsecured wireless network