Reimbursement limit increased
Fraud victims who have fallen prey to scams and lost money through unauthorized bank transfers will soon be eligible for up to £415,000 in reimbursement. The new requirements, set to take effect from October 7, 2024, were confirmed by the Payment Systems Regulator (PSR). This marks a significant change from the previous voluntary system.
Protecting scam victims
A recent study revealed that 13% of adults in the UK have fallen victim to fraud, with 7% losing as much as £5,000. The PSR's move aims to provide a safety net for victims of authorized push payment (APP) fraud, where scammers deceive individuals into transferring large sums of money. In 2022 alone, victims of APP fraud lost a total of £485 million, according to UK Finance.
Consumer obligations
While the new reimbursement system offers much-needed protection, consumers also have obligations when making claims. This includes reporting the scam to their bank within 13 months of the last payment and cooperating with requests for information and with the police.
Shared responsibility
Banks will now have an obligation to be involved in the reimbursement process, as they will bear 50% of the reimbursement cost. This shared responsibility aims to hold banks accountable and prevent fraudulent bank transfers.
Calls for stronger protections
Consumer advocacy groups, such as Which?, have welcomed the new reimbursement requirements but highlight the need for stronger protections. They raise concerns about the £100 excess, which could leave a significant number of APP fraud victims ineligible for reimbursement. The PSR is urged to reconsider this excess amount to prevent fraudsters from targeting lower-value scams.
Note: This article was originally published on an external news site and has been rewritten for a UK audience.
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