Which? super-complaint: Consumer safeguards in the market for push payments

When consumers are subject to sophisticated scams and are tricked into transferring money to fraudsters via ‘push’ payments (such as Faster Payments) banks do not provide the levels of protection that they could – and that they typically do provide for other types of payment. 

The sums involved are often large and can be life-changing for the victims. The use of push payments is growing and likely to grow further as new push payment services are introduced, increasing the risk of such scams.

In this super-complaint we set out evidence that:

• many consumers lose large sums of money to fraudsters after they are tricked into authorising bank push payments, and never recover this money – and this harm may increase;
• the conduct of banks (with whom the fraudsters must themselves hold – or effectively control – accounts) contributes to this consumer harm – if the banks faced different incentives, protection for consumers would improve. 

There are steps that could be taken to protect consumers – similar to those the banks already take to protect against unauthorised payments and card payments authorised as a result of deception. Placing more liability on banks for the losses from such scams would create efficient incentives for banks to develop systems to better manage risks, through identifying and checking high risk payments while maintaining the benefits of Faster Payments (and not reducing liability on consumers who had been grossly negligent or acted fraudulently).