Push payment scams: making fraud victims wait a year to get their money back is a cruel joke

Banks signed up to a code to refund money lost by victims of push payment scams a year ago. So why is it taking so long to actually pay up?

Discovering that you are the victim of a fraud is an incredibly stressful experience.

It’s also deeply embarrassing, with many of us choosing not to tell our nearest and dearest about what has happened ‒ and how much we have lost as a result.

Nonetheless, fraud remains a big issue in the UK.

According to the most recent data from UK Finance, the banking trade body, unauthorised financial fraud across payment cards, remote banking and cheques came to a whopping £824.8 million last year, while authorised push payment (APP) scams duped account holders out of £455.8 million.

Victims of this latter form of fraud may think that they can rely on banks to protect them, given these organisations signed up to a code of practice a year ago.

Yet it would appear that victims are instead being made to wait a ludicrous amount of time before they get their money back.

'My battle to get £17,000 back after an APP scam'

A refund? Come back in a year

According to The Sunday Times, the Financial Ombudsman Service (FOS) last year took 54 weeks on average in order to resolve complaints from people who had fallen victim to a push payment scam but were unhappy about their bank’s response to their case.

And this isn’t the result of the FOS being tardy either ‒ the Ombudsman suggested that delays were often caused by the banks being reluctant to explain why they had refused to offer the victim a refund in the first place, which then resulted in the case being taken to the Ombudsman.

In other words, not only were the banks dragging their feet when faced with a customer in need coming to them directly, they continued this approach once the Ombudsman was on the case too.

What is a push payment scam?

Push payment scams, or APPs, are frauds where the victim is conned into carrying out a transaction that sees them handing over cash to the fraudsters.

This may be where you are expecting to make a payment for an item but you are tricked into paying the money into an account controlled by the fraudster, perhaps because a scammer has sent over a fake invoice from a firm you were expecting to pay, such as your accountant or a tradesperson.

Another common example of a push payment scam is where you receive a call supposedly from your bank, explaining that your account is at risk and money needs to be moved to another account ‒ controlled by the scammer ‒ in order to keep that cash secure.

Protecting victims

Getting money refunded for people that fall for push payment scams can be more complex, according to the FOS, for the simple reason that liability rests with the customer who approves the transaction. 

However, last year UK Finance launched a voluntary industry code, which ensured that victims of these scams are fully reimbursed so long as they were not found to have been guilty of “gross negligence”.

The trouble is that some banks are failing to keep up their end of the bargain. A report last month from the Lending Standards Board, which oversees the code, identified a host of areas for improvement, particularly when it comes to reimbursements.

The report said that judgements on reimbursements were not always made in light of the full circumstances of the case, or of what customers may have believed at the time, but were instead “driven by narrower process considerations”.

It added: “The presumption in the code that victims should be reimbursed unless there is a clear ground for attributing blame to the consumer was sometimes reversed so that the customer was held liable in many cases where the bank was not.”

The FOS has also published a host of examples of cases it has seen, where banks have been too quick to turn down refund claims from push payment scam victims. 

Paying lip service to victims

Evidently some banks are not being anywhere near as understanding as they should be. It’s one thing to say that you are on the side of customers who have been conned into handing over their money, but the proof is in the pudding.

And the fact is that this pudding isn’t looking all that impressive right now. It’s bad enough that these scams have got sufficiently sophisticated that increasing numbers are falling for them.

That banks are then looking to dodge the terms of the code that they themselves signed up for, and avoid refunding those victims where appropriate, is appalling.