British banks not liable for customers` losses from illegitimate transfers

The PSR was responding to a complaint from consumer rights campaign group Which? about authorized “push” payments or APP. APP scams involve bank customers being tricked by phone or email into transferring money to a person or organization they believe to be legitimate.

The campaign has argued that banks should reimburse such transfers in the same way as they already do for scams involving direct debit, credit and debit card payments and fraudulent account activity, according to Reuters. Still, the PSR said there was insufficient evidence to force banks to reimburse APP payments, although it will consider whether it should propose changes as more evidence emerges.

Which? said the Payment Systems Regulator (PSR) had let banks off the hook by failing to address the issue of liability. In response, the regulator announced a package of measures to reduce fraudsters ability to carry out scams and, when illegitimate transfers occur, to increase the chances of recovering the money.

Furthermore, it has asked the industry to develop a way of legally sharing information to help victims recover their money. The sector is also being told to develop, collect and publish “robust” statistics on scams.