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

A new code that comes into force today means banks will have to reimburse most people who fall victim to fraud, up to a limit of £85,000 - but they can also add a £100 charge

Banks have been granted the authority to impose a £100 "excess" fee on fraud victims under new regulations. The fresh code mandates that banks must compensate most fraud victims up to £85,000, provided the transaction is between UK bank accounts.

However, banks now have the option to deduct an excess of up to £100 from the reimbursement amount. This charge is discretionary and will vary depending on the individual's banking institution and their policies.

Vulnerable customers are exempt from this excess fee. Under these new rules, unless a customer has acted with gross negligence or is considered vulnerable, banks are obliged to refund fraud victims.

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Typically, reimbursements should be processed within five working days of a claim being filed. If further investigation is required, banks have up to 35 business days to reach a final decision.

The Payment Systems Regulator (PSR), which is responsible for implementing these new anti-fraud measures, has stated that the £85,000 cap will cover over 99% of claims. In instances where losses exceed £85,000 and are not covered, victims can approach the Financial Ombudsman Service (FOS) for compensation, which has a higher limit of £430,000, reports the Mirror.

New regulations have been introduced in response to a rise in victims of Authorised Push Payment (APP) scams. APP fraud occurs when an individual unknowingly transfers money to a scammer posing as someone they know.

According to data from UK Finance, the total number of APP cases increased by 12% to 232,429 in 2023, with total losses amounting to £459.7 million.

If you suspect you're being targeted by a scammer, immediately hang up and search for the official contact details of the organisation you're supposedly being contacted by online. Never dial back the number provided by the caller.

If you believe a fraudster has gained access to your bank account, contact your bank immediately. You can do this by calling the 159 hotline, which will connect you directly to your bank.

Change any passwords that have been leaked or compromised without delay. Report scams and fraud to Action Fraud by calling 0300 123 2040, or via the Action Fraud website.

If you're based in Scotland, report scams through Advice Direct Scotland on 0808 164 6000 or on the Advice Direct Scotland website. Scams can also be reported to Police Scotland on 101.

For scam emails, forward them to report@phishing.gov.uk, and for scam text messages, forward them to 7726 free of charge. Dodgy websites can be reported to the National Cyber Security Centre.