Banks: Authorised Push Payment Fraud

Lord Livermore Excerpts

Thursday 11th June 2020 Lords Chamber

[Baroness Penn]

As I said to my noble friend Lord Young, there are requirements on banks to ensure that, when bank accounts are set up, the firms identify and verify the customer’s identity. Under the voluntary code which was drawn up with industry, it is currently with the victim’s bank to pay reimbursements if the victim is at no fault in the fraud. Those arrangements expire at the end of this year, and the points that my noble friend and the noble Lord made may be raised with industry when looking at a long-term solution to the issue of reimbursing consumers.

[Lord Livermore (Lab) [V]]

My Lords, Covid-19 is providing fraudsters with new opportunities to prey on the vulnerable, and there are clearly substantial problems with how APP fraud is handled. I return to the point raised by my noble friend Lady Sherlock. Does the Minister believe that the Payment Systems Regulator has sufficient powers to force banks to reimburse customers if they refuse to do so?

[Baroness Penn]

I believe that the regulator has sufficient powers. However, the voluntary code is just over a year old. There will be a review of the operation of that code by the end of the year and, should that review reveal that further powers are necessary, of course the Government would consider the case for that.