If I had my wallet nicked in a pub, it would be a frustrating and upsetting experience, and one which I expect might elicit sympathy from friends and colleagues.
However, if I willingly gave it over to the “wallet inspector” – I reckon I could stop expecting that sympathy.
In either scenario, I certainly would not expect the pub to reimburse me for the loss of my wallet on their property.
And yet from next month, banks will be forced to repay almost all victims of “authorised push payment” fraud, to the tune of up to £415,000 per claim.
In this type of fraud, individuals are convinced to willingly send money from their bank account to the scammer. The manipulation may be to do with romance or concert tickets. An increasingly popular scam involves a message which states: “hi mum lost phone need cash x”. Last year alone, this fraud cost consumers £460m.
That’s not an insignificant sum for banks to have to backstop – money that could be spent on improving customer services or investing in innovation.
The figure is also likely to rise, as trade body UK Finance warned fraudsters would be encouraged to take advantage of the absurdly generous rules to engage in “complicit fraud”, whereby they posed as victims to claim compensation money.
Quite reasonably, banks are taking action to defend themselves. As a result, all of us will experience greater friction in our financial lives. Thanks to the new rules, banks have been given the power to freeze payments for up to four days.
More than simply frustrating, experts have already warned these new powers could cause chaos for anyone buying a home.
Now, I don’t have £415,000 to give the wallet inspector, and I don’t see how this comes anywhere near a fair limit.
Compensation under the Financial Services Compensation Scheme, which protects customer deposits when an authorised financial services firm fails, is only available up to £85,000 – if you’re lucky.
In these cases, individual customers are not at fault. They have given their money to businesses regulated by the Financial Conduct Authority and through failings at those firms – and/or the regulator – have found themselves out of pocket.
How can it be that we’re protecting those who have made poor decisions to a tune almost five times greater than those let down by the City watchdog?
While I do have some sympathy for the emotional nature of this fraud, at some point we have to stand up as adults and take accountability for our actions.
We’ve all been told for years not to trust someone who calls up from the bank, to question the unexpected WhatsApp from an unknown number or the too-good-to-be-true deal that can only be yours if you send money immediately.
No other crime comes with a guaranteed refund and no other victims are handled with kid gloves so persistently, despite there being more deserving instances on both counts.
Instead, victims of other crimes are immediately questioned over their culpability: did you leave your phone on the table? Do you keep your house keys under the mat? Were you walking home through the wrong part of town?
This is not to underplay the devastating impact this crime can have on people’s lives as all crimes have the potential to change our lives for the worse.
We must reset our sympathies and treat bank transfer scams equally with other crimes – or we’ll all continue to pay the price.
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