After many of the main banks signed a voluntary code, the customers who are tricked by fraudsters in transferring their cash can now be assured of protection and refund from the bank. The voluntary code about the practice for authorized push payment reveals that the scam victims are expected to be reimbursed unless if they had ignored the warning from the bank about a scam or they were very negligent as they were transferring this money. This agreement applies to all scam cases which are reported as from today on 28th, May.
Up to now, many banks have been able to offer refunds especially when payments are made in a fraudulent manner without the authorization of the customer. However, they have not been given authority to offer a refund when a customer is tricked in making a payment himself/herself by the fraudsters.
This voluntary and untested code of practice is very new, therefore we will have to have to wait and see how effective it will be. Although by reading this guide you will get to know what this code involves and your rights, one of the best thing you should know is what to care about so that you can avoid being a victim.
Meaning of authorized push payment scam
App scams refer to when one tricked in transferring money from his/her own bank to another person. In many cases, the money which is lost is usually transferred quickly to other different accounts and later withdrawn by the scammers. One of the reports which were released last year by trade association UK Finance showed that consumers lost about £92.9 million in just the first half of 2018 due to such type of fraud.
Things you can do so that you can avoid being a victim
Earlier this year, the industry body of UK Finance started working closely with the government so that they could build a website and help sheets which can prevent the general public from falling a victim of such a kind. Below are some of the tips which you can look if you do not want to be a victim.
You should be aware that even if someone knows some of your personal details, for instance, your full names, address, personal identity number/passport number or your parents name it does not imply that they’re genuine.
Trusted organizations like police and banks cannot contact their clients asking them for their full passwords, PIN or transfer money from your account to another without your authorization. It’s good that you question any uninvited approaches who may be asking for your personal information since they can scammers. If you are not sure, then you MUST contact the organization or company directly using their trusted phone number or email address to confirm if the person requesting for your information is genuine.
Avoid being in a hurry when it comes to clicking on links in unexpected text or email. This is one of the newest ways that scammers can use in getting your personal details.
How the new code of practice works
This voluntary code makes banks which have signed it to make a commitment to various types of measures of tackling APP fraud. One such measure includes conducting regular training which will educate customers about scammers and they lure people in transferring their own money. In addition, this code highlights that banks have a mandate of identifying higher risk scam customers and when these customers when they can identify a scam so that the delay in making a payment as they investigate this case scenario.
Currently, this code only applies to money transfers between United kingdom account and oversees accounts are yet to be covered.
How a refund will work
In case the bank is to be blamed, then it will offer you a full refund. This implies that if the customers die all that they were expected to do and the bank failed to meet the standards and rules set out in this code, then customers have a right to get full reimbursement.
On the other hand, if neither the customer nor the bank is to be blamed, the customer can still get a full refund. Since both the bank and customers who are involved in the scam transaction did what they were expected to do then the refund will not come from the bank. In this case, the customer will be reimbursed from a collective pool fund which is funded by banks. Currently, there some arrangements which are being done so as to have long term funding.
In a scenario where both the bank and customers are to be blamed then the customer will receive a partial refund. The amount you will receive will depend on who will receive higher blame. For instance, if your and bank fail to meet the expected standard, then you will get about one-third of the money which you lost. In case the blame is that of the customer, then he/she will not get any refund.
The banks must decide if they will refund the victim within the 15 days when the scam has been reported up to a maximum of 35 days in the exceptional cases. In case you disagree with the ruling offering by the banks then you can complain your case to the ombudsman in charge of finance.
Things the customer is expected to do
This code does not state exactly what the customer is expected to do so as to comply with its requirements. However, it states that one will not be an aid if he/she made a payment without having a justifiable basis as he/she believed that…
- The business/person you were doing a transaction with was genuine and legitimate
- The payment made was for genuine goods and services.
- The payee was indeed the person that you expected to pay.
For instance, you cannot get a refund in case you bought a car from eBay and the seller requested you to make a transaction offsite, you went ahead in sending him/her money without even seeing the pictures of the car itself. However, if you had the opportunity of visiting the seller and seeing the car by yourself before making the payments, then you would have a justifiable basis that the payment was genuine even it was a fraud case.
However, there is an exception to the rules of this code, if the customer has been classified as being vulnerable. The customer is vulnerable to the scams if it was not reasonable for you to expect the customer to protect himself/herself from the extent of the scam they suffered. In this case, the customer must be refunded even if he/she has not met the provisions set above.
Banks which have been signed up for this code
- Metro bank
- M&S Bank
- Barclays banks
- Lloyds bank
- Bank of Scotland
- Carter Allen
- First Direct
- Intelligent Finance
- HSBC UK
- Ulster Bank
- Starling bank
- Santander bank
Some of the largest financial institutions which have not signed up for this code include the Yorkshire bank, Cooperative bank, Virgin Money, Tesco Bank, and Clydesdale bank.
What can you do in case you are a victim of bank transfer scam
You must make your first call to your bank and the report the scam to the Action Fraud by calling them through 030012320140.
In case the ban does not offer you any assistance or you have waited for about 8 weeks without any response, then you can inform the ombudsman.
For you to start your complaint, you can call 08000234567 or visit the financial ombudsman website so that you can fill a form.
From today, you must be aware that the ombudsman will only consider the code for banks which have signed to it. Some of the people within the financial industry hope that this code may be considered in all financial institutions in the future. In case you were a victim of APP fraud before today, then this code will not apply. However, you can still complain about using the previous existing scam laws.