Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to (a) support vulnerable people when using banking services and (b) tackle fraud and scams perpetrated against those people.

The Government is strongly committed to ensuring those with a characteristic of vulnerability have access to appropriate, useful and affordable financial products and services. The Government also works with industry to combat fraud and ensure members of the public have the information they need to spot a scam and stand up to fraudsters. The Government works closely together with regulators and stakeholders from the public, private and third sectors, to ensure that all consumers of financial services are appropriately protected.

UK banks’ and building societies’ treatment of their customers is governed by the Financial Conduct Authority (FCA) in its Principles for Businesses. This includes a general requirement for firms to provide a prompt, efficient and fair service to all of their customers.

The FCA’s Guidance for firms on the Fair Treatment of Vulnerable Customers requires that firms should understand what harms their customers are likely to be vulnerable to and ensure that customers in vulnerable circumstances receive the same fair treatment and outcomes as other customers.

If a firm has doubts about a consumer’s ability to understand a product or service, suspects they do not have capacity to make decisions or that they are acting as a result of fraud or coercion, the firm should assess whether it should allow the consumer to proceed. It may be appropriate for firms to contact, or act on the instructions of, a family member, friend or other third party.

The Government also recognises the actions of the financial services industry to help tackle fraud, including through investment in anti-fraud capabilities, the creation of a voluntary reimbursement Code, and the implementation of initiatives such as Confirmation of Payee. While we welcome these initiatives, it is clear that more needs to be done both to prevent these scams, and to ensure that victims are not left paying for fraud through no fault of their own.

The Government therefore welcomed the Payment Systems Regulator’s recent consultation on Authorised Push Payment scams, which set out potential measures that could improve scam prevention and outcomes, including proposals to introduce mandatory requirements to reimburse victims. The Government has confirmed it intends to legislate to address any barriers regarding regulatory action regarding mandatory reimbursement when parliamentary time allows.