Payment Fraud – Can you get your money back?

Payment fraud is one of the single biggest issues currently affecting consumers. With a constant increase in online transactions and the number of platforms we use, the opportunities for fraudsters are multiplying. In particular, there has been a rise in authorised push payment or “APP” fraud – instances where the fraudster tricks the victim into […]

Payment fraud is one of the single biggest issues currently affecting consumers.

With a constant increase in online transactions and the number of platforms we use, the opportunities for fraudsters are multiplying. In particular, there has been a rise in authorised push payment or “APP” fraud – instances where the fraudster tricks the victim into sending money to the wrong account. In the first half of 2018 the figure lost in these scams was £92.9m.

Fraudsters’ techniques are becoming highly sophisticated, meaning even the tech savvy are at risk.

For instance, I recently acted for a well-run business that uses tech to give itself an edge in the market – they were defrauded of a very significant sum. In that case, the fraudsters tricked the business into paying money to the wrong account, then for days after continued to send fake emails in which they posed as employees of the business and as the client who was the intended recipient of the payment. By the time the business realised that the emails from their client weren’t real, the money had, inevitably, long gone.

Is there any protection from the banks?

The financial services industry is live to this issue and is taking steps to put in place protection for individuals and very small businesses.

There has been ongoing consultation in the industry and the matter has been subject of a “super-complaint” from the consumer organisation Which?

As a result a draft voluntary code was set out at the end of September 2018. Under the code it is intended that there will be a degree of protection and reimbursement for some customers. It is not yet clear who will abide by the voluntary code or what the true outcome for customers will be. The code also only provides protection to individuals and very small businesses.

A final code is expected in early 2019 and so there should be more certainty at that point. For now, however, there is no guarantee of protection.

How can you get your money back?              

There are a few steps which you should take as soon as you become suspicious that fraud may be taking place:

  • Don’t make any (more) payments
  • Notify your bank
  • Notify Action Fraud

Your bank should freeze the relevant bank accounts and get in touch with the providers of any accounts into which money may have been transferred.

Action Fraud is the UK’s fraud and cyber crime agency and your information could be important in fighting this type of crime. They will give you a crime reference and will take steps to investigate.

At this point you should request all of the information you can from your bank and Action Fraud – they have information which should give an insight into what has happened and where the money has gone.

You can then look into what has gone wrong, how the banks could have better protected you, and whether they should reimburse you. You may wish to take advice on this.

The business I mentioned was successful in recovering the vast majority of the money it lost because they followed the above steps without delay, although there can be no guarantees.

If you or your business has been affected by payment fraud, or you are concerned about the issue, I’d be glad to discuss it with you.

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