HSBC issues £85,000 warning over new rules which begin on October 7
HSBC has called on tech firms to help refund victims of fraud. The bank says new UK compensation rules will fail to curb APP scams and prove financial sector is not the problem as it throws its weight behind calls for tech firms to pay up for fraud.
HSBC warns incoming compensation rules requiring banks to reimburse scam victims up to £85,000 will fail to stem the flow of fraud. David Callington, the head of fraud at HSBC UK, said rules coming into force on 7 October would motivate banks and payment firms to improve their fraud detection systems. “The wider ecosystem, and key players in that ecosystem, have to be held to account,” Callington said. While banks needed to be vigilant, the financial obligations needed to “sit with those other sectors as well”, he said. “They need the financial incentive.”
“What we would urge for is a shifting of some of those obligations into regulation, so there is an actual obligation on other sectors who are part of the ecosystem to take action and protect what are our common customers, our common users,” he said.
READ MORE Martin Lewis warns people on Tax Credits, Housing Benefit or ESA from DWP
However, “regulators will only step in when they see that actually there’s not enough traction [on preventing fraud], and we’re not generating the outcomes that we want … from the voluntary aspects that have been put in place”, Callington added.
A spokesperson for the lobby group techUK said: “There is no lack of incentive for action, and the online safety act will place further significant legal obligations on online service providers. Extending responsibility for reimbursement would be neither effective nor proportionate. Instead, the focus must be on working together to develop better technical solutions to identify and disrupt online fraud and to prosecute the criminals who commit this crime.”
A Treasury spokesperson said reimbursement for victims of APP scams was a matter for the PSR. “The announcement of a consultation shows the regulator is listening to feedback as it seeks to strike a balance between protecting fraud victims and managing the impact on industry,” they added.