TSB is all set to unveil a “fraud refund guarantee” to make sure that its 5.2 million customers are reimbursed in full if they are proven to be an innocent victim of some kind of scam.
The move is a first in the banking industry of the United Kingdom. It will put customers at the heart of a new strategy that aims to tackle the fast-growing problem of bank fraud in the digital age.
In the online IT banking fiasco of last April, thousands of customers who were locked out of their TSB accounts were then exploited by scammers, stressing the growing sophistication of fraudsters.
The bank will probably to commit to protecting against all types of transactional fraud losses up to a cap amounting to £1 million, including cases where the customers of TSB have been tricked into authorising payments to fraudsters.
In general, the consumers are entitled to a refund when a fraudster syphons off money from their account even without their knowledge. However, Richard Meddings, the executive chairman of TSB, said that the bank was keen to clarify the “grey area” when individuals unwittingly authorised the payments to fraudsters and were then unable – or had to fight – in order to get their money back.
Meddings stated: “Our own experience last year gave us an in-depth insight into the nature of these frauds.”
He added: “But above all, we felt that offering a guaranteed refund – and accepting that customers may have made an honest mistake – was the right thing to do. In some cases, people have been losing life-changing sums of money.”
According to UK Finance, a trade body, over £1.2 billion were stolen by criminals that committed bank fraud last year. Of that, £354 million was lost through bank transfer scams in which the victims were tricked into directly transferring money from their account to a fraudster – a so-called authorised push payment (APP) fraud. Purchase scams are considered as the most prevalent type whereby victims pay in advance for a product or service, such as a holiday rental, or a car, which was not received or did not exist.