The victims of scams and financial fraud will automatically be refunded under a new scheme which comes into force today (Tuesday).
In situations where individuals are tricked into transferring money to fraudsters, they will be refunded from a central pot of funds when their bank is in no way to blame. However, not all banks have signed up to the scheme.
It comes after 84,000 people lost money due to scams last year, some of whom lost tens of thousands of pounds. Over £350 million was lost by individuals and businesses to fraud last year, but less than £85m was recovered.
Victims will only get their money back if the funds are still in the account they were transferred to, most banks’ policies dictate, leaving very few who get their money back.
From today, the voluntary code will see payment providers and banks assess whether or not a refund against a new set of criteria. Any person considered to be ‘vulnerable’ will get their money back, as well as those who took reasonable care to determine whether or not the transfer was legitimate.
Organisations signed up to the scheme will all contribute to the central pot in the short-term, with a long-term funding solution to be agreed by the start of next year.
TSB has gone one step further to announce that all “innocent” victims will receive refunds. However, Virgin and Co-op banks are the most notable of those not signed up to the scheme. They have both said they can only sign-up to the code ‘in the future’.