Shortfall of £3bn In APP Fraud Compensation
Victims of bank transfer (authorised push payment (APP)) fraud are receiving less than 50% of their losses back in compensation according to secure payments provider Shieldpay.
This shortfall seemingly coincides with the introduction of a new industry code which is designed to protect consumers.
However, with only APP fraud victims getting on average of 48% of their losses back, it means they’re stung twice, as they face a shortfall of £3billion.
Shieldpay’s findings also discovered that shockingly 15% of victims receive no form of compensation at all.
The introduction of the voluntary code offering customers protection from APP fraud was introduced in May 2019. However, there are stipulations as to whether a victim will receive a full refund. The main one being if the bank you’re with has signed up to the code.
If a customer can prove they’ve taken reasonable care against APP fraud and their bank has signed up, they will be compensated for their loss.
However, if the bank and the customer have not followed the requirements stipulated in the code, then only a partial refund will be made.
Peter Janes, CEO and Founder at Shieldpay, says:
“The voluntary code introduced last year is a positive step but compensating victims is simply fire-fighting without tackling the source of the problem.
“Fraudsters must be stopped in their tracks and consumers protected against transferring money into accounts which are held by scammers.”
Who has signed up to the voluntary code?
The following financial institutions have signed up to the code:
- Lloyds Banking Group
- Metro Bank
- Royal Bank of Scotland
It’s worth noting that TSB has its own fraud guarantee which is a separate entity to the voluntary code.