Push-payment protection proposed
By Teamspirit on Monday, 13 November 2017
The Payment Systems Regulator (PSR) is proposing a new scheme that would see people compensated when they fall victim to so-called push-payment fraud.
Push-payment fraud is the name for an increasingly widespread way of scamming people online. It involves hacking into a reputable company’s email system (a builder, or solicitor for example), and emailing customers with requests for money along with bank transfer details. Rather than paying the company, the customers then unsuspectingly send money direct to the fraudsters.
So far, banks have been reticent to pay compensation for victims of push-payment fraud, arguing that the security of companies’ email systems is not their responsibility.
However, the PSR acknowledges that this is a growing problem. In the first six months of 2017, more than 19,000 people fell victim to push-payment fraud, involving a total of more than £100m.
So, now the PSR is encouraging the financial sector to tackle the scam head on, proposing a system of checks to ensure banks have a consistent way for responding to fraudulent transfers, and setting out the parameters for when compensation should be offered.
Consumer body Which?, which lodged a ‘supercomplaint’ with the PSR about the inconsistency of provisions made by banks against push-payment fraud, welcomed the move, saying that it was ‘good to see the regulator coming down on the side of consumers.’