From October, UK banks will be 💯% liable for #scam losses - even when the payment is authorised by the customer. (It doesn’t mean you can all go and get scammed now! 😅) Authorised Push Payment fraud is where a victim is tricked into making a large bank transfer to an account posing as a legitimate organisation. But in a few months, people will be fully reimbursed and the costs will be equally divided between the bank managing the customer's account sending the funds and the bank operating the account receiving them. 🤔 Not only could this force banking costs to rise, I predict we could see an increase in attempts as fraudsters will know the money is available. I also think we may see an uptick in first-party fraud where the actual account holder uses their own credentials for fraudulent means.
You pinched my post! Just kidding - but you beat me to the punch. I've been talking about this a lot lately in the context of a business I was contacted by last year. £300k gone from a phone-call man-in-the-middle. The bank refused to reimburse because it was "authorised" and the business went bust. It's a very positive development - it is capped at £415,000 and still excludes Gross Negligence, but puts the onus on the bank to prove negligence rather than on the customer to prove they weren't.
On one hand this sounds like a great idea and about time, but on the other can you see this will mean that free banking for consumer will come to an end and actually doing any banking transactions will become even more painful, bank branches are closing so face to face confirmation is becoming harder, it is actually quite painful to move sums of money as it is, will this make it even harder and more painful for the customer?
Fully agree. We need to be careful how this is broadcast to stop a feeling of “well I’ll get the money back anyway” which will impact costs for everyone.
Won't this just motivate the scammers to move the funds out of a UK bank asap? I've even seen scams in the Czech Republic, where the scammer asks for an international transfer outright...
Wow, banks covering scam losses? That's big news! But let's not forget, smarter fraud detection systems will be key. Can't just throw money at the problem and hope it goes away.
This seems to me like it will make consumers less cautious, why do their due diligence and assess the situation properly if they'll get their money back anyway?
Interesting! Surely there should be more punishment on the bank who let the crook open the account in the first place!
One of the benefits of PSD2, you have baked in strong Customer Authentication methods which support a more resilent process to users not being scammed. Not to say it still cant happen and indeed will, but the level of data collected on the user flow in PSD2 via any banking transaction means there's a decent level of informationo to detect on whether something is potentially and actually fraudelent!
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3wAt what point does the customer become responsible for their own actions? I have seen cases where I have personally informed the victim that they have been the subject of fraud, yet they are so emotionally invested, they still send the fraudster money (romance fraud in particular). There are even cases where the alleged activity the alleged victim is involved in is itself a criminal offence, yet the victim then complains when they find out that they are the target of the crime, not the insurance company, bank, or relevant executer of a will. In those cases, should we really be reimbursing the victim? My personal belief is that there needs to be some sort of balance in the equation. If there isn't, then we may open the doors to even more frauds, especially when "victims" realise that they will never be held to account.