Following our super-complaint last year, the Payment Systems Regulator (PSR) has set out its approach to tackle the problem of bank transfer scams. But will these plans go far enough?
As we pointed out last year, unlike with the protections in place for other payment methods, such as credit or debit cards, those who fall victim to a scam when transferring money from their bank account will find that they aren’t protected.
The PSR has already agreed with us that banks could to do more to protect their customers.
And in its response to our super-complaint last year, it suggested that banks need to improve the way they respond to bank transfer scams, and do more to identify fraudulent payments.
It also proposed a package of work for the industry to take forward.
This included developing common standards to collect data, an approach to responding to instances of reported scams, and proposals for better sharing of information.
Terms of Reference
Under the PSR’s proposed plans announced today, the regulator will examine how other countries approach preventing and responding to this type of scam.
It will also compare how the payments industry tackles other types of scams and fraud, such as those involving payments made by credit or debit card.
In particular, it’s looking at what more the bodies who manage the payment systems (like Faster Payments) can do to protect consumers.
It’s also considering whether banks themselves could be required to do more, if they want to use these payment systems for their customers.
We’re pleased to see the PSR’s commitment to tackling the significant consumer harm caused by bank transfer fraud.
We strongly believe banks need to do more to protect their customers.
Currently there’s little incentive on them to put in place better safeguards, and banks have failed to adequately respond to the problem to date, despite seeing their own customers losing life changing sums of money.
Next steps
We need the PSR to take action, propose new measures and look at banks’ liability when it comes to sophisticated payment scams.
Which? will be responding to the PSR’s proposed approach by the deadline of 21 March.
But, in the meantime, there is nothing stopping the banks from taking a lead and setting out how they are going to ensure that consumers aren’t left out of pocket.
Banks are due to report back to the PSR later this summer, and we expect to see clear and meaningful progress.
If they fail to deliver, then the regulator must step in and require the industry to put in place better measures and checks to prevent customers from losing money to bank transfer scams.
Update: 4 April 2017
Following its consultation, the Payment Systems Regulator (PSR) has published the final Terms of Reference for its program of work to tackle bank transfer scams.
The PSR listened to feedback from Which?, as well as others, and accepted many of our points, including ensuring that:
- the focus is on seeing better outcomes for consumers;
- any proposals consider the way that scammers quickly adapt their methods and are future proofed; and
- there is a clear timetable that starts to deliver real change for consumers quickly.
We will be watching closely to ensure that the PSR sticks to its timetable and makes swift progress.
There is still a massive gap in the protection for victims of transfer scams and there is more that banks can be doing themselves.
It’s now six months since we first raised the alarm, and we’ve not seen many changes from banks in terms of how they’re preventing customers from losing money.
We’re keen to hear from you – have you noticed your bank doing anything differently to protect people from scams? What do you think of the PSR’s approach? Would you like banks to be doing more?
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