In the UK, millions of pounds are lost every year to bank transfer scams. But, under a new voluntary code introduced this week, victims will get more protection from scammers.
However, not everyone will benefit from the new rules, so let’s have a look at how they work and who will be protected:
How does it work?
Bank transfer scams consist of criminals trying to trick bank account holders into transferring money to them.
Sometimes, they will pretend to be calling from the person’s bank and will ask them to transfer the money as a security measure. Or they might pretend to be a bank representative and try to sell the person a product or service.
The problem is, previously, banks had been refusing to refund a lot of customers’, as they had authorised the transfer. A fairly low percentage of these victims were being refunded.
The new code will require banks to follow a new set of rules to give the customer more protection. This includes identifying vulnerable customers’ and freezing payments that are suspicious and might be a result of fraud.
Both your bank and the bank receiving the transfer will be responsible for this process, and if either has not met their responsibilities, the customer will be entitled to a refund from their bank.
If neither bank was responsible, then the customer will be refunded from a dedicated pool of funding – this part of the process is only guaranteed until the end of 2019.
Who will benefit from the code?
The code will apply to customers of:
However, it’s important to note that the banks can refuse the refund in certain situations, such as:
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