Banks: Authorised Push Payment Fraud

Baroness Sherlock Excerpts

Thursday 11th June 2020 Lords Chamber

[Baroness Penn]

The noble Baroness is right that the Lending Standards Board has looked at reimbursements and found that, under the voluntary code, they have not been as high as expected. It has issued individual reports to each firm, with actions that they should take to improve matters. The industry continues to work on a longer-term solution and, where voluntary solutions are not possible, there is scope for further regulatory action.

[Baroness Sherlock (Lab) [V]]

My Lords, evidence from the Financial Ombudsman Service, of which I was a director, shows a wide variation in how banks are handling this. It sees firms making decisions based on assertion and not evidence; firms relying on generic warnings, even if they do not work; firms taking an unreasonable view of what an ordinary consumer ought to know, or do, before making a payment; and refunds making only half payments, instead of full. Why is the Minister confident that the code is working? How long will the Government wait before considering giving the PSR stronger enforcement powers?

[Baroness Penn]

The code is little over a year old. However, the Lending Standards Board will follow up on the review it has made of reimbursements with each of those firms. The follow-up exercise will take place later in 2020, to ensure that all actions recommended are fully embedded and that customers are properly reimbursed.