Wednesday 29 January 2020

Co-op Bank signs up to bank transfer scam reimbursement code

The code commits banks to reimburse bank transfer scam victims who lose money through no fault of their own.

The Co-op Bank signed up to the voluntary code (PA)
The Co-op Bank signed up to the voluntary code (PA)

By Vicky Shaw, PA Personal Finance Correspondent

The Co-operative Bank has become the latest provider to sign up to a voluntary code giving blameless bank transfer scam victims greater protection.

The code sets standards to detect and prevent authorised push payment (APP) scams, and provides a commitment to reimburse customers who lose money through no fault of their own.

APP scams happen when someone is tricked into transferring money directly into a fraudster’s bank account, often because the criminal is posing as being from a legitimate organisation such as a business, a bank or the police.

In the first half of 2019, 57,549 consumers collectively lost £208 million as a result of such scams.

Many people who have been scammed in this way have, in the past, lost large sums of money for good, as they had authorised the transaction and so their bank was not obliged to give them a refund.

We'll continue to work to ensure the best outcomes for customers who fall victim to fraud and, in line with the code, we will refund customers who are left out of pocket through no fault of their own by implementing a self-fund model to reimburse customers who lose money in a ‘no blame’ situation Andrew Bester, Co-op Bank

The voluntary code was launched in May, making it easier for customers to get their money back in “no blame” situations where they did everything that could have been expected of them under the code, and their bank also acted correctly.

But not every bank has signed up to the code and long-term funding still needs to be agreed.

It has also been argued that a patchwork approach to giving blameless scam victims their money back through a voluntary system does not go far enough.

Other providers which have already signed up to the code include Barclays, HSBC, Lloyds Banking Group, Metro Bank, NatWest, Nationwide Building Society and Santander.

TSB has its own fraud refund guarantee, which means that if a customer is clearly the innocent victim of fraud on their TSB account, they should receive a refund.

Andrew Bester, chief executive of the Co-operative Bank said: “We’ll continue to work to ensure the best outcomes for customers who fall victim to fraud and, in line with the code, we will refund customers who are left out of pocket through no fault of their own by implementing a self-fund model to reimburse customers who lose money in a ‘no blame’ situation.

“We will also help customers understand more about the risk of scams and fraud, and raise awareness of the kinds of things that customers should be looking out for to help them avoid this type of situation.”

Consumer group Which? said banks who have currently not signed up to the code include Bank of Ireland, Citibank, Danske Bank, First Trust Bank, Monzo, N26, Tesco Bank and Virgin Money.

Many other current account providers are still not signed up to these vital protections, exposing their customers to a greater risk of losing life-changing sums of money Gareth Shaw, Which?

Gareth Shaw, head of money, Which?, said: “This is an important step from the Co-operative Bank and its customers should now be better protected against devastating transfer fraud.

“However, many other current account providers are still not signed up to these vital protections, exposing their customers to a greater risk of losing life-changing sums of money.

“A voluntary approach to protecting scam victims is not enough. The code should be made mandatory and the Government must work together with regulators and the industry to put in place long-term plans to ensure no blameless victims are left out of pocket.”

PA Media

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