Banks 'are failing to bring in fraud protections' in time
Vital fraud protections should be made mandatory, a consumer watchdog has warned, as a report found that more than £1 billion is estimated to have been lost to bank transfer scams in just three years.
With measures set to come in that should significantly reduce the amount of money lost to authorise push payment fraud (APP), Which? has raised concerns that some banks may not introduce the protections on time, or even at all.
Royal Bank of Scotland (RBS) is one of two major banks which were unable to confirm a date when it would bring in new security measures which confirm a name linked to a payment.
Bank of Scotland, however, became one of the first institutions to introduce the measures earlier this month. APP is when a consumer transfers money from their own bank account to one belonging to a scammer – such as if they are conned into believing a phone call is from the fraud department of their own bank.
End of March
Which? warned that the payments regulator and banks have been slow to introduce much-needed protections for consumers.
These measures – confirmation of payee (CoP) – is due to be introduced by most of the UK’s major banks by the end of March. CoP ensures that a check is made on whether or not the name a customer enters when making a payment matches the account details it is being sent to.
It helps to stop fraudsters from posing as trusted organisations such as a bank or solicitor and tricking people into making payments to them.
‘Vital for banks to sign up’
The Payment Systems Regulator has only directed the six biggest banking groups to sign up by the end of this month, but Which? believes all banks need to join the scheme in order for it to be effective.
Gareth Shaw, head of money at Which?, said: “The UK has been in the grip of a fraud crisis for years, but new security measures offered by the banking industry should finally give people better protection against increasingly sophisticated fraudsters.
“At the end of this month, we should get a true sense of how well the industry is tackling the issue. It is vital for all banks to sign up.”
A spokesman for RBS said: “We believe Confirmation of Payee is an important part in protecting our customers from scams and we are working with other banks to ensure we introduce this in the coming weeks.”