UK Government proposals designed to provide hundreds of millions of pounds worth of reimbursement to scam victims across the country have been labelled “fundamentally flawed” by lawmakers. In the UK, the Treasury Select Committee stated that the proposals are also taking too long to be instated.
Under the new plans devised by the Payment Systems Regulator (PSR) revealed last September, British banks will need to refund within a 48-hour window any customers who are fooled into sending funds to fraudsters.
Scams known as “authorised push payment” schemes have risen to become one of the UK’s largest types of payment fraud and, in 2021, cost customers approximately £583 million. Lawmakers on the Treasury Select Committee have criticised the plans, stating that mandatory reimbursements should start in 2022 at the latest, not by 2024 as planned. They also added that the PSR’s plan for Pay.UK to manage reimbursements would result in an “inherent conflict of interest” because it is guaranteed by Britain’s financial services industry.
The Treasury commented:
“Putting an industry body in charge of reimbursing scam victims is like asking a fox to guard the henhouse.”
Each year, many UK consumers fall foul to financial schemes engineered to steal their savings. Investment scams are one of the major threats in this category of fraud where criminals create bogus schemes, luring savers in with promises of considerable profit and zero risk. Wary Britons often seek independent financial advice in Chester, London and other cities before investing in schemes they are unsure of.
