A new voluntary code to reimburse UK customers who fall victim to authorised push payment (APP) fraud should be made compulsory and applied retropectively, says the Treasury Committee. MPs have also called for a 24-hour delay on a subset of Faster Payments transactions to give people the chance to consider if they are being defrauded.
In the first half of this year, over £600 million was stolen from Brits, with consumer group Which? warning that losses from money transfer scams are 'spiralling out of control'.
APP fraudsters have become adept at tricking customers into authorising payments into scam accounts, using a variety of social engineering cons and electronic trickery to dupe their victims into thinking the payouts are legitimate.
In a report, the Treasury Committee says that the recently introduced Voluntary Contingent Reimbursement Model is a welcome step by banks.
However, the MPs say that the model should now be made compulsory and suggest customers that have fallen victim as far back as 2016 should be reimbursed: "Firms should strongly consider whether refusing to retrospectively reimburse customers who relied on the payee name is fair and just."
To help cut APP fraud, the industry is rolling out a Confirmation of Payee system, which will cross reference payee names with account numbers and sort codes.
Initially, the service was supposed to be up and running this summer but has been pushed back, with an industry deadline set for March 2020. The Treasury Committee says that any provider that misses this should face possible sanctions.
Meanwhile, the MPs have called for a 24-hour delay on all first-time transactions made through Faster Payments to give people the chance to consider if they are being defrauded.
Rushanara Ali MP, Treasury Committee, says: “The Government and regulators should take on board all of the Committee’s recommendations to enhance consumer protection in the face of this harmful tide of criminal activity.”