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Update from Which: Today is the day But only some banks have signed up so far – so will you be protected?

People tricked into sending their life savings to fraudsters could see their money reimbursed from today onwards, as a new voluntary code comes into effect. But only some banks have signed up so far – so will you be protected?

Which banks have signed up?

The new code is a huge step towards protecting consumers and ensuring victims aren’t out of pocket – but not everyone will benefit. Around 17 brands, covering 85% of all electronic transfers, have signed up so far.

Customers of the following banks can rest assured that they’ll be protected by the new rules:

  • Barclays
  • HSBC
  • First Direct
  • M&S Bank
  • Lloyds Bank
  • Bank of Scotland
  • Halifax
  • Metro Bank
  • Nationwide
  • Royal Bank of Scotland
  • NatWest
  • Ulster Bank
  • Starling Bank
  • Santander
  • Cahoot
  • Cater Allen

Meanwhile, if you bank with TSB, you can benefit from its new fraud guarantee, where it promises to reimburse any of its customers who are genuine victims of fraud.

“TSB has gone further than any bank by promising to refund all innocent customers who’ve fallen victim to fraud – even if they were tricked into handing over personal details or have sent money directly to a criminal.

From 14 April onwards, the bank’s 5.2 million customers will be protected by a ‘fraud refund guarantee’ which will see the bank reimbursing genuine victims of fraud. The scheme will not be retrospective.”

Approximately £674 every minute is lost to bank transfer scams, new research from Which? has found. In the past year alone, victims lost a total of £354m, with most of it stolen from personal accounts.

Earlier this year, the banking industry introduced a new voluntary code that would offer increased protection from scammers, including reimbursement to blameless victims. The move came two years after Which? launched a super-complaint to push banks and regulators to better protect people who lose money to bank transfer scams.

The new code comes into effect today, but not everyone will benefit.

Which? explains who will be protected, and urges more banks to sign up to safeguard your cash.

and government – does all it can to tackle this devastating crime and prevent money getting into the hands of criminals.’

How the code protects you

In a bank transfer scam, a criminal tricks you into transferring money to their bank account. Often, scammers will pose as your own bank, asking you to move your money to ‘protect it’.

Alternatively, they may imitate an organisation you trust, like HMRC, or try to sell you goods or services that don’t exist.

Previously, banks often refused refunds because the customer technically ‘authorised’ the transfer, even where the victims were targeted by sophisticated criminals. In fact, last year, just 23% of the losses were returned.

Under the new code, banks and payment providers will be required to follow a new set of standards to protect customers, including detecting high-risk payments, identifying vulnerable customers, and delaying or freezing payments that might be part of a scam. Both the bank who sent the payment and the one that receives it have a duty to take action.

If you fall victim, and either bank has fallen short of these standards, your own bank will be required to refund your losses. If the banks did nothing wrong, you’ll still be reimbursed from a communal pool – although funding for this is only guaranteed to the end of 2019.

Banks will also bring in a new security system, known as ‘confirmation of payee’, which will warn you if the name you enter doesn’t match the account details.

The deadline for banks to start issuing checks was originally 1 July 2019, but it’s now been pushed back to 31 March 2020 – a delay that’s expected to cost a further £109m in losses.

Ruth Evans, independent chair of the APP Scams Steering Group, said: ‘From today, the majority of consumers will be covered by the Code and it is great to see that many more banks and PSPs are working towards joining the scheme. It remains vital that every sector – banks, consumer groups, technology and telecom firms, regulators and government – does all it can to tackle this devastating crime and prevent money getting into the hands of criminals.’

Article Credit: Stefanie Garber, Which?