People who have been conned into authorising their bank to pay a fraudster could find it easier to get compensation, under plans being put together by the regulator.
The Payment Systems Regulator is trying to devise a way to reimburse victims of authorised push payment (APP) scams.
In the first half of this year, 19,000 victims lost £100m to APP scams.
One such, Kate Blakeley, described the “sheer horror” of discovering the loss of almost £300,000 through such a scam.
Ms Blakeley, who was in the process of buying a house with her partner, described her experience. She thought she was transferring money to the right account, but it was in fact one controlled by a fraudster.
“Everything had gone very smoothly,” she said. “Our conveyancing solicitor provided details by email of the bank accounts to make the money transfers on the day of completion.
“We transferred just under £300,000 on the day and within about three hours, we realised the money had gone missing.
“The moment of realising the money hadn’t arrived as intended with the bank account we sent it to, or thought we’d sent it to, was just sheer horror.”
Ms Blakeley did get all the money back eventually, but lost thousands in solicitors’ fees. The matter is still subject to a legal dispute.
‘No silver bullet’
The PSR has been investigating APP scams following a super-complaint by consumer body Which?.
The regulator said “good progress” was being made in a number of areas and it hoped a compensation system would be in place by September 2018.
As well as starting to record and understand the scale of APP scams, the PSR will also introduce new standards for banks to follow when a victim reports such a scam, which should improve victims’ experience and banks’ response times.
However, PSR managing director Hannah Nixon warned that not every scam could be prevented.
“There is no silver bullet for APP scams, and some people will still, unfortunately, lose out,” she said.
“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.”
She added that account holders also needed to take “an appropriate level of care” in protecting themselves.