A new code of conduct has been created but it is not binding in law yet, so really it’s just a set of guidelines.

This has been created by the Payment Systems Regulator after Which? raised a super-complaint about the banks treatment of people defrauded in push payment scams. These are the scams where the victim transfers money to a scammer from their bank account. The banks consider these to be largely the victim’s own fault and hence not their responsibility. But many disagree and believe the banks should identify and stop these payments where possible and make it more difficult for scammers to get away with these frauds.

The issue of who pays compensation and under what circumstances has not been resolved – when should the banks compensate the victims of push payment fraud?

Figures from trade association UK Finance show that in the first half of 2018 consumers lost £92.9 million because of this type of fraud.

The guidelines propose the principle that where the victim of such a crime has met their requisite level of care, they should be reimbursed.

The draft code has been published by the APP Scams Steering Group, made up of industry and consumer group representatives. It has been open for consultation.

It said there may be instances where a victim of this type of fraud has met their requisite level of care, and so should be reimbursed, but no bank or other payment service provider involved has breached their own level of care.

It will work to identify “a sustainable funding mechanism” through which to reimburse consumers in such a scenario.

Under the draft code, banks and other payment service providers would take measures to tackle APP scams, such as:

• Detecting APP scams through measures such as analytics and employee training;
• Preventing APP scams from taking place by taking steps to provide customers with effective warnings that they are at risk;
• Responding to APP scams, for instance, by delaying a payment while an investigation is conducted and, if necessary, carrying out timely reimbursement.

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