A mew code that will allow victims of one of the UK’s fastest growing forms of fraud to receive reimbursement from banks comes into force today.
Authorised push payment fraud occurs when a victim authorises a bank transfer into an account they believe is legitimate, but is actually controlled by a fraudster.
The number of reported cases jumped 93 per cent in 2018 to 84,600, up from 43,900 in 2017.
According to UK Finance statistics customers lost £354m to authorised push payment scams in 2018, with just £83m recovered.
Banks and other payment providers which are signed up to the new voluntary code will from today agree to reimburse victims if certain conditions are met.
Victims may not be able to make a claim if they ignored warnings about scams, if they were grossly negligent, they acted dishonestly when reporting the scams or they did not take steps to ensure the person receiving the money was legitimate.
The code only covers consumers, charities and micro-enterprises of 10 people or fewer.
Alan Sheeley, head of civil fraud at law firm Pinsent Masons, said: “The code is a welcome step towards tackling this fast-growing type of fraud and its often devastating consequences.
“However, we see larger businesses fall prey to authorised push payment fraud who will not be covered by this scheme. It is important that these businesses are aware of the effective methods of recovering lost monies under the civil law.”
The code aims to ensure consumers remain vigilant, while incentivising banks and other payment providers to take action and respond to scams with the aim of reducing their number.