New UK bank law could charge customers £100 if they're scammed

Bank customers could be charged £100 for being scammed under new UK law
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Bank customers could be charged £100 within days if they are scammed. UK banks are divided over whether to charge customers an “excess” fee of up to £100 when reimbursing victims of push payment fraud, it has been reported.

Starting next Monday, new rules will require banks and payment providers to compensate customers within five working days if they are tricked into sending up to £85,000 to criminals via push payment scams. Under the new rules, a victim required to pay a £100 excess would effectively not get any of the loss back.

Liz Edwards, money expert at personal finance website Finder, said: “Based on 2023 figures, more than 58,000 cases would have resulted in no refund if all companies had applied the excess. £100 is a lot of money to many people, and banks need to be clear with customers where they stand.”

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NatWest said it may apply a fixed excess of £100 to the total amount reimbursed to customers. The bank said: “This [will be] assessed on a case-by-case basis and with regard to the specific circumstances of each customer.”

Metro Bank and payment service providers Modulr and Zempler all confirmed they would be charging the £100 excess in full. Nicola Bannister, customer support director at TSB, said one-third of all fraud claims the bank received were for £100 or less, with purchase fraud scams that originate on social media making up a large part of the total.

“£100 can be a lot of money to somebody,” she said. Other banks including Barclays, Lloyds, HSBC, Monzo, Starling, the Co-Operative Bank and Danske Bank said they had yet to finalise their position on excess charges, but intended to contact customers with updated terms and conditions before the new rules took effect on October 7.

More than £459mn was lost to push payment fraud in 2023, according to UK Finance, which logged a 12 per cent rise in the volume of cases year on year. Under the current voluntary system of reimbursement, banks returned £287mn of money lost to victims, a reimbursement rate of 62 per cent.