At Sussex Retirement Planning, we understand how vital it is to protect your hard-earned money from scams. Scammers are becoming more sophisticated, particularly in targeting the vulnerable. Thankfully, new rules have been introduced by the Payment Services Regulator. These were introduced on Monday 7th October, covering payments made by individuals, “micro-enterprises” or smaller charities using Faster Payments or CHAPS in the UK.
Importantly, payments made by debit, credit or prepaid cards aren’t covered. Nor are cheques or cash. International payments aren’t covered too.
If your claim is successful, you should be refunded within five business days. However, in some cases, the bank may need extra time to investigate, and a refund may take longer.
There is a limit of £85,000 for each claim.
Banks Now Liable for Refunds
As a result of the new rules, banks are now responsible for refunding victims of authorised push payment (APP) fraud. APP fraud happens when you are tricked into transferring money directly to a scammer, often believing it’s a legitimate transaction. Previously, banks were not obliged to reimburse you if you willingly authorised a payment, even if it turned out to be fraudulent.
The new rules will make it much easier to get your money back in such cases.
However, you are obliged to follow the Consumer Standard of Caution, and this means you must:
- Follow any specific warnings given by the bank (the police or similar) that advise you that you may be at risk of being a victim of a scam.
- Let your bank know as soon as possible if you think you’ve been a victim of a scam.
- Share any information the bank reasonably asks you to help assess your claim.
- Report the scam to the police or allow the bank to report it on your behalf.
These requirements don’t apply if you’re considered by the bank to be a vulnerable customer, which has an impact on your ability to avoid the scam.
You must also report the APP scam within 13 months of the last payment.
There is a £100 excess which can apply to payments, although banks can waive this.
Keeping Your Money Safe Online
While these new rules offer greater protection, it’s always important to stay vigilant. It’s always better to avoid scams in the first place. It is, however, essential to understand the new measures to ensure you remain eligible. Our advice remains that, if you ever have a concern, take some time to reflect and ask somebody else what they think. Feel free to contact us if you are ever uncertain – we are here to help and there are definitely no stupid questions with regard to financial fraud.
Philip Wise | philip@sussexretirement.co.uk
Managing Director and Chartered Financial Planner
This blog is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
