TSB has become the first major UK bank to refund to cyber crime victims who are tricked into parting with money from their bank accounts by fraudsters.
But will more banks follow suit?
What’s the problem?
Last year, a total of £354 million – that’s almost £1 million a day – was stolen by push payment fraud.
Push payment fraud is a real-time scam whereby criminals con individuals or businesses into sending a payment to a fraudulent bank account. This type of scam is usually used to take money during housing transactions, or when paying professional service invoices, and criminals will con victims intercepting mail or hacking emails, before sending a payment demand while posing as the legitimate business.
Will banks refund cyber crime victims?
Up until now, banks have not been refunding the victims of push payment fraud. And because payments made using real-time payment schemes are often irreversible, customers haven’t been able to claim back the payment once they’ve realised they’ve been conned.
In short, banks claim that customers need to be more careful.
But that could all be about to change, as TSB has pledged to refund cyber crime victims, and will only refuse to pay up if a customer continues to ignore safety advice and is repeatedly conned out of their cash.
Since TSB’s decision, other big lenders have signed a voluntary code that requires them to refund scam victims from May 28, but these refunds will only be applicable until the end of the year in cases where neither the bank nor the customer is to blame.
TSB has made its pledge before the official reimbursement model takes effect, something the other big banks have been reluctant to do – this means if you’re a customer of any bank other than TSB and you get scammed before May 28, your bank isn’t obliged to refund you.
Push payment fraud – a cautionary tale
