Security & Fraud

Consumer Group Wants Banks To Be More Accountable For Transfers To Fake Accounts

The U.K.’s Payment Systems Regulator (PSR) is gearing up to look into complaints from consumer group Which? over the level of protection banks give customers who are tricked into sending payments to fake bank accounts.

According to the report, Which? thinks banks should take on more of the burden for money that customers lose due to scams made by bank transfer. What’s more, Which? wants banks to create better ways to prevent the fraud from happening to begin with. Which? also wants the FCA and the PSR to investigate its concerns and calls for regulatory action that would force banks to adopt safeguards to protect consumers.

“We all now regularly use bank transfers to pay for things, but what most of us don’t realize is that, if you’re conned into paying out money to a fraudster, you stand to lose all of your money, unlike when you use your credit or debit card. With scams on the rise, consumers can only protect themselves so far, and we believe that banks must do more to tackle bank transfer fraud and safeguard their customers from scams,” Alex Neill, director of policy and campaigns at Which?, said in a report. The consumer group raised the issue as a super complaint with regulators in the U.K., which means the agencies have to respond within 90 days.

“The PSR will now examine the evidence Which? has supplied and gather its own to build a clearer picture of the issue and decide a course of action,” PSR said in a statement, according to the report. Scams impacting consumers both in the U.K. and in the U.S. are on the rise. With the growing number of ways to access money, fake transfer scams are becoming more common.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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