LONDON Banks are under no obligation to reimburse tens of thousands of people who have lost millions of pounds by making transfers to fraudsters, a British regulator ruled on Friday.
The Payment Systems Regulator, part of the Financial Conduct Authority (FCA), was responding to a "super complaint" from consumer body Which? about authorized "push" payments or APP.
APP scams involve bank customers being tricked by phone or email into transferring money to a person or organization they believe to be legitimate.
Which? has argued that banks should reimburse such transfers in the same way as they already do for scams via direct debit, credit and debit cards and fraudulent account activity.
However, the PSR said there was insufficient evidence to force banks to reimburse APP payments, although it will consider whether it should propose changes as more evidence emerges.
"In a short space of time we have built a clearer picture of the problems we are facing, and it is evident that this type of scam is a growing problem that needs to be tackled," Hannah Nixon, managing director of the PSR, said.
"Tens of thousands of people have, combined, lost hundreds of millions of pounds to these scams, but the data we have seen so far is incomplete. We need a concerted and coordinated industry-wide approach to better protect consumers, and we need it to start today."
The PSR announced a package of measures to reduce fraudsters' ability to carry out scams and, when the do occur, to increase the chances of recovering the money.
It has asked the industry to develop a way of legally sharing information to help victims recover their money.
"We look forward to working with all parties... to help develop a common understanding of what can and cannot be shared under existing legislation and then develop actions needed to change that legislation if necessary," FFA UK, a banking industry body, said.
The sector is also being told to develop, collect and publish "robust" statistics on scams.
Christopher Woolard, executive director of strategy and competition at the FCA, which also received the Which? super complaint, said the FCA will address any "firm-specific" issues directly, and take further action if need be.
(Editing by Alexander Smith)