Which?’s super-complaint

We received the super-complaint, ‘Consumer safeguards in the market for push payments', on 23 September 2016. 

Which? was concerned that when consumers are tricked into transferring money to a fraudster via a ‘push’ payment (such as when the consumer instructs their bank to send money) there is not an appropriate level of protection compared to other types of payment.

Specifically, Which? believed an investigation is needed to address the following:

  • The extent to which banks could change their conduct to reduce consumer harm from scams that trick people into authorising push payments to a fraudster
  • Possible changes to legislation or regulation, to change the incentives on banks and payment system operators, and to ensure that more is done to manage the risks from these types of scams and to protect consumers from harm

Our response

On 16 December 2016 we published our formal response to the super-complaint.

Our key findings were that:

  • The way banks worked together to respond to scams needed to improve
  • There was evidence to suggest more could be done to identify fraudulent incoming payments and prevent accounts from being under the influence of scammers
  • The data available on the type and scale of scams is of poor quality

In response to these findings, we developed a programme of work aimed at reducing fraudsters’ ability to perpetrate scams and, when they do occur, increasing the chance that the victim will be able to recover the funds.

Industry-led actions

We agreed a programme of work with Financial Fraud Action UK (now integrated into UK Finance) that the banking industry should lead on:

  • Developing and collecting clearer data on the scale and scope of the problem
  • Developing a common approach on responding to reported APP scams
  • Developing a common understanding of the information that can be shared under current law and identifying any legal barriers to sharing

We confirmed we would monitor this work on an on-going basis, and commit to review industry progress in the second half of 2017.

What have we done?

On 7 November 2017 we published a report and consultation explaining the work the PSR, the Financial Conduct Authority (FCA) and the payments industry (represented by UK Finance) have been doing in the past year to reduce the harm to consumers from authorised push payment (APP) scams – where people are tricked into sending money to a fraudster.