Back in September, we made a super-complaint to the Payment Systems Regulator (PSR), calling on it to do more to protect people from being tricked into transferring money to a fraudster. Today, the regulator responded – but will its plan be enough?
In short, it has agreed with us that scams involving bank transfers are a serious problem, and one that’s growing.
Evidence from our online scams reporting tool gave additional insight into how big an issue it is likely to be. Hundreds of people told us stories of how they, or someone they knew, have collectively lost over £5.5m due to bank transfer scams.
The regulator has told banks that they need to do more to protect their customers. It has said that banks need to improve the way they respond to bank transfer scams, and do more to identify fraudulent payments. But is it enough?
Scams super-complaint
We don’t disagree with some of what’s being proposed by the regulator – improvements to banks systems and security are very much needed.
However, people might be surprised to know that not all banks currently do some of the things the PSR is now asking of them. And yet, in not so many words, the regulator has said that it’s now over to the banks to see if they can improve things and they’ll check in later next year.
But having admitted that bank transfer scams are such a concern, this doesn’t seem good enough.
For us, the problem comes down to whether the banks are incentivised enough to stop bank transfer scams. The regulator has said that it’s not yet convinced it needs to make banks more liable. So, for now, consumers targeted by sophisticated scammers will continue to bear all the loss, unlike if they’d been tricked into making a payment by credit card.
There’s little evidence to suggest that banks will suddenly and swiftly up their game to meet what’s needed – although, we hope they do and we’ll support them to do so.
But, their inaction to date, and the fact that they’ve needed Which? and then the regulator to intervene to tell them what more they need to do, points to the need for a much stronger approach.
The PSR hasn’t ruled out looking at changing rules to make sure that liability sits in the right place. Obviously, this needs to be looked at carefully, and we’ll continue to push them to address this in the New Year.
Next steps
Without putting more liability onto banks, which would give them clear incentive to quickly put in place better systems to prevent people losing money to bank transfer scams, we’re not convinced we’ll see enough progress.
And in the meantime, people will continue to lose life-changing amounts of money to scams which they could not reasonably be expected to protect themselves from.
What do you make of the PSR’s response? Do you think it goes far enough? Do you trust the banks to do all they can to protect their customers from scams, when the losses don’t hit their own bottom line?