Banks will now be forced to accept complaints from fraud victims if they have allowed criminals to open accounts, under proposals from the City watchdog.
In a major victory for Telegraph Money’s Make Banks Act on Fraud campaign, the FCA has published plans which would allow you to complain to a bank despite not being a customer.
Bank transfer fraud, officially known as “authorised push payment” fraud, where a victim is tricked into sending money to scammers, has hit record levels with £236m stolen last year.
Telegraph Money has consistently called on the banks which received the stolen money, and often breached money laundering regulations by allowing an account to be opened with false credentials, to do more to support victims.
Most are told they must liaise with their own bank and are given spurious reasons, including data protection, for the recipient bank’s silence.
Many of these sorts of scams involve life-changing sums. One of the most common types of case involves a criminal impersonating a conveyancer and stealing money for a house deposit. The worst case Telegraph Money has seen resulted in the victim losing £600,000.
If the Financial Conduct Authority’s (FCA) proposed rules are adopted it would mean fraud victims could make an official complaint to the criminal’s bank and, if they were unsatisfied with the response, then take the case to the Financial Ombudsman Service.
Christopher Woolard, the watchdog’s executive director of strategy, said: “The FCA takes push payment fraud and the harm it causes to consumers very seriously.
“Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it.
“We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the Financial Ombudsman Service.”
The Payment Systems Regulator (PSR) is currently working on an industry framework which will determine in what circumstances a bank or building society should refund victims or pay compensation. The finished document is expected later this year.
A spokesman said the body welcomed any changes which would help reduce the impact of bank transfer fraud on victims. “The PSR is driving a range of initiatives in this area, working with industry, consumer groups and other regulatory and government bodies to make it harder for criminals to commit this type of crime – but if they do occur, to reduce the impact on the victim,” she added.
Telegraph Money has reported in the past on the unwillingness of recipient banks to support the victims of crime, even when they have allowed criminals to open accounts.
In one case Halifax held a victim’s money for six months despite admitting the account in question belonged to fraudsters. It only refunded the £8,000 after pressure from Telegraph Money.
The FCA is welcoming comments on its proposals until September 26 and is expected to publish its final findings before the end of the year.
Source: The Telegraph