TSB becomes first bank to offer ‘refund guarantee’ to fraud victims

TSB has become the first UK bank to guarantee customers will receive a refund if they are the victim of fraud on their account.

The high street lender said it would cover its 5.2 million customers against all forms of transactional scams, including those where they have been tricked into authorising payments to fraudsters.

Consumers lost a combined £354m last year on these scams which are known as advanced push payment fraud. Only £83m of that was recovered, figures from trade body UK Finance show.

TSB customers will be able to claim compensation for APP fraud that took place on or after 14 April 2019.

The move could go some way to winning back consumers’ trust in TSB which took a dent after long-running technical problems last year. More than a million customers were locked out of their online accounts for several days, eventually leading to the resignation of former chief executive Paul Pester.

Across the sector, bank customers are entitled to compensation if they are the innocent victims of fraud, but this is not necessarily the case if they have authorised the payment.

Thousands of customers have lost significant sums of money after being persuaded to transfer money. Fraudsters often pretend to be representatives of a bank and claim that there has been fraud on a customer’s account which requires them to move money immediately.

Under TSB’s guarantee, customers will need to contact the bank to report fraud. Customers who try to abuse the guarantee – for example, by committing fraud on their own account or repeatedly ignoring safety advice – will not be covered.

TSB executive chair Richard Meddings said: “The vast majority of fraud claims across UK banking are from innocent victims of fraud who have been targeted by criminals and organised gangs.

“However, all too often these customers must fight to be refunded and are not treated as victims of crime.

“We want to provide peace of mind to our customers, that’s why we’re proud to announce the TSB fraud refund guarantee.

TSB said it is also tackling fraud in other ways, including preventing scams through increased education in local communities.

It has also been partnering with local police forces to hunt down criminals, resulting in multiple arrests and successful prosecutions.

Jenny Ross, Which? money editor, said: “For years, people have lost life-changing sums of money to increasingly sophisticated scams, and then faced a gruelling battle to get their money back.

TNT Business

Photo Credit: Financial Times

Related News