Major bank rule change could see customers hit with £100 charge from today

Under the new code, banks will be forced to reimburse most people who fall victim to fraud, up to a limit of £85,000 - but lenders can choose to add a £100 excess charge to this

Banks will have the power to hit fraud victims with a £100 “excess” charge under new rules that come into force today.

Under the new code, banks will be forced to reimburse most people who fall victim to fraud, up to a limit of £85,000. The new protections apply when a transfer is made to and from a UK bank account. But banks can also choose to add an excess of up to £100 to your claim - this in theory means the money you’re reimbursed could be reduced by £100.

This is an optional charge, so it all depends on who you bank with and if they choose to have this in place. The excess cannot be applied to vulnerable consumers. Under the new rules, banks will be required to reimburse fraud victims unless they have been grossly negligent or the customer is vulnerable.

In general, you should be reimbursed within five business days of making a claim. It can take longer if banks need more time to investigate - but a final decision must be reached within 35 business days. The Payment Systems Regulator (PSR) - which is overseeing the new fraud rules - says the £85,000 limit will cover more than 99% of claims.

Where more than £85,000 is lost and not reimbursed, fraud victims could choose to lodge a claim with the Financial Ombudsman Service (FOS), which has a compensation limit of £430,000.

The new rules have been brought in following a surge in people falling victim to Authorised Push Payment (APP) scams. APP fraud happens when a victim unwittingly sends money to a scammer who is pretending to be someone they know. The total number of APP cases was up 12% to 232,429 in 2023, according to UK Finance data, with total losses of £459.7million.

How to report scams

If you suspect a scammer is calling you, hang up immediately and search for the contact details online of the place you're supposedly being called from. Never call back the number provided by the caller. Contact your bank straight away if you think a fraudster has got access to your account. You can call the 159 hotline, which will connect you to your bank.

Passwords that have been leaked or compromised should be changed immediately. Make sure you report scams and fraud to Action Fraud by calling 0300 123 2040, or through the Action Fraud website. If you're in Scotland, report a scam through Advice Direct Scotland on 0808 164 6000 or on the Advice Direct Scotland website.

You can also report scams to Police Scotland on 101. For scam emails, forward them to report@phishing.gov.uk, and for scam text messages, forward them to 7726 for free. You can report dodgy websites to the National Cyber Security Centre.