Some victims of bank transfer scams may still lose money despite new regulations aimed at strengthening consumer protection against fraud. Several major banks have introduced a £100 excess on refund claims, meaning certain victims of authorised push payment (APP) scams could be left out of pocket.
The new rules, which came into effect on 7 October 2024, mandate banks and payment companies to reimburse victims who were deceived into transferring money to fraudsters. However, the £100 excess is optional, and not all banks have chosen to adopt it. If a scam victim loses £90, they would not be eligible for reimbursement, while someone defrauded of £300 could only receive £200 back. Importantly, the excess does not apply to “vulnerable” consumers.
APP scams, which involve tricking individuals into making authorised payments to scammers, have become a growing concern. To address this, the rules now cover payments of up to £85,000. Yet, nearly one-third (32%) of all APP scam cases involve sums under £100, according to industry data, leaving many victims at risk of losing everything without reimbursement.
Banks such as Nationwide Building Society, Virgin Money, and TSB have opted not to implement the excess, offering full refunds to eligible scam victims. However, other banks have introduced the charge, and customers are being warned to stay alert.
Lloyds Bank has started notifying customers about the £100 excess through messages displayed during online transactions and within its mobile app. Similarly, NatWest has used bank statements and in-branch digital displays to raise awareness of the policy.
All major banks have stated that refund claims will be evaluated on a case-by-case basis. For example, Lloyds clarified that it would waive the excess if a customer could not take reasonable steps to protect themselves during a transaction. NatWest echoed this approach, saying it considers a customer’s vulnerability when reviewing claims.
HSBC, which applies the £100 excess, explained: “We want to encourage customer caution, particularly for lower-value online purchases. While we apply the excess to reimbursements, we review each customer’s circumstances to ensure fairness.”
Meanwhile, Nationwide has taken a different stance, refusing to introduce the excess. A spokesperson said: “It is vital we support victims of crime during their time of need while focusing on preventing fraud and scams from occurring in the first place.”
The policy changes also apply to newer financial institutions and payment platforms. Revolut has published information about the excess on its website, while Monzo has stated it will decide on a case-by-case basis whether to apply the £100 charge, taking into account the customer’s specific situation.
These developments highlight the need for consumers to remain vigilant, especially when making online payments, as the battle against fraud continues to evolve.