The U.K.’s Payment Systems Regulator (PSR) is gaining the ability to make banks provide compensation to victims of “push payment scams,” the Financial Times reported Tuesday (May 10).
Push payment scams include any situation where a victim sends money to a recipient for what turns out to be a fraudulent reason. The regulator’s move is supposed to show the “disparities” in the current compensation approach, which is done on a voluntary basis.
According to Rocio Concha, director of policy and advocacy at consumer group Which?, scam victims often face what’s termed a “reimbursement lottery” that depends on who they bank with. Concha said that the regulator will need to ensure that firms “treat their customers consistently and fairly.”
The measure, announced Tuesday, is part of the Financial Services and Markets Bill, which also features a commitment to ensuring continued access to cash withdrawals and deposits.
This all comes after the government said in November that it would be strengthening the powers of the PSR, setting rules for banks and other payment service providers, as scams have been on the rise for years now since the pandemic began.
All of it comes as many high street banks have become signatories to a voluntary code which was established in May of 2019. That added more compensation for victims, but the government criticized the “inconsistent” application, which came with varying kinds of compensation among different banks.
Visa has said the level of scams has only gotten harder to deal with, with phishing and compromising becoming harder to detect. Dustin White, the Visa chief risk data officer, said creativity in the scams was “No. 1” on a fraudster’s resume.
See also: Inside Visa’s Fraud-Fighting Cyber Machine
This, he said, had led to phishing success — 78% of people getting unsolicited links still click on them. That can lead to bad actors making off with a variety of data, making it so they can do fraudulent transactions down the lines.
Many times, customers don’t know they’ve gotten scammed for an extended period of time.