More protections are on the way to help victims of payment scams – but they won't be introduced until 2018.
The Payment Systems Regulator (PSR) says it's making 'good progress' in supporting scam victims.
Some protections have been put in place already, but many of the key actions yet to be launched include:
- Guidelines for identity verification, authentication and risk assessment to make it harder for fraudsters to open accounts that they use for scams;
- Confirmation of payee which lets customers check they’re sending their money to the right person;
- Transaction data analytics that will allow banks and other payment bodies to close down mule accounts and spot potential fraudulent payments;
- Improved data sharing which will help banks work together to respond to scams faster and more effectively;
- 'Know Your Customers' data sharing for banks (due in 2020) which will provide more opportunities to detect fraudsters and genuine customers, stopping fraudsters opening accounts they use for scams.
Figures from UK Finance show that, in the first six months of 2017 alone, more than19,000 people were a target of Authorised Push Payment (APP) scams – where victims are tricked into handing money over to scammers – involving a total amount of over £100 million.
Changes in the way victims are reimbursed
The PSR is seeking feedback which it says will help it to set up a ‘contingent reimbursement model’ by 2018. Respondents will outline when they think victims would get their money back and which banks/payment organisations should shell out the cash.
If you want to take part in the consultation, head over to the PSR website and get your responses in by 12 January 2018.
Reimbursement would depend on what measures banks put in place to help prevent and respond to scams along with how much care the victim took in protecting themselves.
That means many victims will still lose out.
Hannah Nixon, managing director of the PSR, said:
“There is no silver bullet for APP scams, and some people will still, unfortunately, lose out. That’s why we’ve continued to look for a solution that could reimburse those who are scammed, and today we begin consulting on an option that we think could work.
“To be successful, the model must be pragmatic: consumers will need to be vigilant and protect themselves, but equally we expect banks and payment service providers to uphold best practice – and when they don’t there should be reimbursement.”
How to stay safe
APP scams can come in many forms – email, phone, text, face-to-face – but you can protect yourself.
Don’t give out your personal details unless you’re absolutely sure who you’re speaking to.
Banks won’t contact you by email and ask you to click a link to confirm your bank details so fight the temptation to click. If you want to check if the correspondence is legitimate, login to your online account as you normally would and find out that way.
Similarly, if you’re contacted by phone and you suspect the caller is dodgy, hang up the phone and wait for five minutes. Call back on a number you trust, like the one on your bank card.
You can report scams to Action Fraud using this online tool or by phoning 0300 123 2040.
It’s a good idea to keep track of your credit report and look for anything suspicious as well. Go to the loveMONEY comparison centre and get a 30-day free trial.