20 Apr, 2019 | Bankis
TSB is the first UK bank to create a policy to refund customers who fall under any type of fraud. The policy is called "fraud refund guarantee" and will cover situations where customers are led into payments to frauds schemes including also unauthorised transactions. The decision arrives as the bank rebuilds its reputation after an IT meltdown last April which affected 1.9 million customers of being able to access their accounts.
Banks have been under pressure to help to fight innovative fraud. Richard Meddings, chief executive of TSB, said that the decision was "about giving peace of mind to our customers and doing the right thing". He also added that TSB has investing in education for customers and staff about fraud, and have warned fraudsters: "If you come for one of my customers, we will hunt you down."
Customers who are tricked into transferring money directly from their account to a fraudster are however less likely to benefit from the scheme since they approved the payments. Around £354m has been reported lost in 2018 by the means of scam also known as a "push" or "authorised" payment fraud, according to the UK Finance trade body and form those £354m only £83m have been recovered and refunded to the victims of fraud. Examples of authorised payment fraud include scammers protracting as builders, lawyers, or other type contractors who allegedly have carried some sort of work for the victim. Then these fraudsters submit a fake invoice with the fraudster's bank account details . Unfortunately these customers who have been victimized struggle to get refunded and are mostly not treated as victims of crime," said TSB executive chairman Richard Meddings.
From 14 April 2019, under the refund scheme guarantee, customers will need to contact the bank and report fraud in order for investigation to start. This disclosure of information and report will need to include what exactly happened and how, so it can educate customers and ensure they are protected from future fraud. TSB however warned it customers that it would not refund those who try to abuse the guarantee scheme if they have been found of committing fraud on their own account or by systematically ignoring the safety advice given when reporting fraud. Apart from this move from TSB, banks and building societies have also agreed to do more to protect their customers by introducing a new voluntary code which comes into effect on 28 May 2019.