A voluntary code for banks that helps innocent victims of bank transfer fraud to get their money back is to be strengthened.
The code helps victims of authorised push payment (APP) scams, where people are tricked into transferring money directly into a fraudster’s bank account, often because they believe they are dealing with someone else, such as their bank, a legitimate business or the police.
Before the code was set up, people often lost large amounts of cash for good, because they had authorised the transfer. But under the code, people can get refunds in situations where neither they, nor their bank, are to blame.
However, there have been concerns that not all banks are interpreting the code in the same way and in some situations people are being expected to have a high level of financial knowledge.
The code is overseen by the Lending Standards Board (LSB), which said on Tuesday that, following a full review, new governance and oversight requirements will be included in the code, ensuring customer-facing staff have greater awareness of it.
To drive more consistency of how the code is applied across the industry, the LSB previously said expectations around governance arrangements should be set out to ensure that the code is embedded within the culture of banks, from senior management through to customer-facing staff.
The updates to the code, which will be effective from June 14, are part of wider activity that the LSB is undertaking following its review.
Emma Lovell, the LSB’s chief executive, said: “The introduction of the governance and oversight provision will set out a clear framework to ensure that the code is embedded within the culture of a firm – an area both the code review and our oversight work has identified as being critical to improving the outcomes for customers.”