Regulation  

Trading standards demands paused payments for vulnerable

Trading standards demands paused payments for vulnerable

Vulnerable customers should be able to self-declare their status and disable “faster payments” to prevent them from being scammed, experts have warned.

It follows the Payment Systems Regulator’s (PSR) response to the Which? super-complaint calling on banks to better protect customers who are tricked into transferring money to fraudsters.

The complaint highlighted the problem of ‘push’ fraud where victims are conned into paying the wrong person.

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The Payment Systems Regulator has said banks need to do more.

Now the Chartered Trading Standards Institute (CTSI), Bournemouth University’s National Centre for Post-Qualifying Social Work and the National Trading Standards (NTS) scams team have said more needs to be done to protect vulnerable people.

Steve Playle, lead officer of the Chartered Trading Standards Institute, said: “There is a gap in consumer protection in the banking sector when ‘push payments’ are unwittingly used to send money to scammers.

“Banks clearly have a duty of care to their customers but expecting them to be liable for every bank transfer to a fraudster as suggested by Which? is, perhaps, a step too far. 

“However, plans to ensure that there is a matching account number, sort code and name in any bank transfer will certainly help, but they are a little way off yet”

The Which? super-complaint, lodged in September 2016, raised concerns that there was not enough protection for people who are tricked into transferring money to a fraudster through a push payment.

The Payment Systems Regulator has said it is examining the submitted evidence and gathering its own to build a better understanding of the issue.

Louise Baxter, manager of the National Trading Standards scams team, said: “The main super-complaint has not covered issues such as the increasing vulnerability of adults with cognitive impairments like dementia.

“We feel the measures that we propose should be considered in the short-term while the banks and regulators take a closer look at push payments.”

damian.fantato@ft.com