Save scam victims from losing life-changing sums after Brexit transition ends, Which? urges government 

Which? is calling for the government to legislate to protect people from losing life-changing sums of money to bank transfer fraud, a crime that has already cost consumers £200 million in the first half of 2020 alone.

In its response to the Treasury’s review of the payments landscape, the consumer champion has outlined how changes to legislation could allow regulators to require all banks to follow a statutory code offering strong protections for scam victims.

Up to now, the Payment Systems Regulator (PSR) has claimed that a European Directive has prevented it from requiring bank transfer fraud victims to be reimbursed.

This would replace the current voluntary code, which is being applied inconsistently, leaving customers facing a lottery when it comes to getting their money back – with many victims of sophisticated scams still denied reimbursement.

The move could allow the PSR to push through changes to the payments system that facilitates bank transfers, introducing stronger protections for victims of bank transfer (APP) fraud – similar to a guarantee that already covers direct debits.

Which? believes that by making these changes, the government can show that it will use the  legal flexibility resulting from Brexit to benefit consumers – and could potentially cut the amount victims lose to bank transfer fraud by tens of millions of pounds a year.

In the first six months of 2020, a total of £207.8 million was lost to authorised push payment fraud. Of the £126.5 million lost in cases assessed under the code, just £47.9 million was reimbursed to victims.

The current industry code on scams – known as the Contingent Reimbursement Model Code – is based on the fundamental principle of fully reimbursing those who have lost money to criminals through no fault of their own. It was introduced following a Which? super-complaint that highlighted the glaring gap in this type of fraud compared to other forms of payment such as debit and credit cards.

However, since its introduction in May 2019, when eight banks signed up, the pace at which other banks have joined the Code has been too slow. Major firms such as Clydesdale and Yorkshire Bank, Monzo and Tesco Bank are yet to sign up.

Clearer standards for banks are also needed to bring an end to the reimbursement lottery consumers face. These should be built into any new statutory code.

Until these changes are made, the PSR must use its existing powers to press ahead with a much-needed review of the effectiveness of the current voluntary code and explore options for strengthening it.

Despite the amounts returned to customers having doubled since its introduction, average reimbursement rates of around 40 per cent have been worryingly low, given customers should get their money back unless they are clearly at fault.

Reimbursement rates by individual banks, which have been published by the PSR anonymously, fluctuate dramatically, with one firm fully reimbursing just 1 per cent of victims, whereas another had fully reimbursed 59 per cent. Which? believes the current lack of consistency means many customers face a lottery when it comes to trying to get their money back.

The introduction of new standards through a statutory code would not stop firms from going even further for their customers. TSB’s Fraud Refund Guarantee, for example, already promises to refund all losses, unless customers have been wilfully or recklessly negligent. It says it has reimbursed 99 per cent of victims.

Gareth Shaw, Head of Money at Which?, said:

“The end of the Brexit transition period presents the government with an opportunity to help thousands of people who might face the devastation of losing life-changing sums of money to scams.

“The government should legislate for stronger standards to ensure banks are treating customers fairly and consistently, with greater protections to help them get their money back if they fall victim to fraudsters.”

“Until this happens, the payments regulator must review the effectiveness of the existing code and explore other options that could provide more effective protection for consumers.”



  • The Payment Systems Regulator says that it currently lacks the powers to take action on reimbursement. This is based on the Payment Systems Regulator’s interpretation of the EU Second Payment Services Directive; notably that it expressly prohibits EU member states – and the UK, during the transition period – from forcing payment service providers to go beyond the terms set out in the Directive.

  • As a result, the Payment Systems Regulator argues that it cannot currently require reimbursement to be made to APP fraud victims. The Payment Systems Regulator did note that this position may well change in the near future, and as the UK’s future relationship with the EU becomes clearer, it is possible that the Payment Systems Regulator will be able to take action.

  • A change in legislation would provide the regulator with the power to direct the Faster Payments Scheme, which facilitates bank transfers, to introduce a new guarantee into its rules that includes protection for victims of APP fraud – similar to the guarantee that Pay.UK oversees for direct debits. As members of Faster Payments are required to follow the rules of the scheme, this would ensure that the code is adopted across the industry.

  • TSB said its Fraud Refund Guarantee has reimbursed 99 per cent of victims, only rejecting customers whose claims were found to be fraudulent with the customer complicit in the case.

  • Fraud victims face a lottery to get their money back –

  • The information in this press release is for editorial use by journalists and media outlets only. Any business seeking to reproduce information in this release should contact the Which? Endorsement Scheme team at


Press Release