New compensation rules from Lloyds, Nationwide, Santander, NatWest, HSBC, and TSB have been heavily criticized by bank account holders, with fraud victims sharing how the crime has deeply affected their lives and left them “unable to sleep” amid the ongoing Cost of Living crisis.
In 2023, there were 252,626 reported cases of Authorised Push Payment (APP) scams, totaling nearly £341 million, according to the latest official data.
This amounts to approximately 692 cases per day, or nearly 29 cases per hour. Nationwide has been noted for its high compensation rate, covering 96% of affected customers.
One victim recounted: “I couldn’t sleep. I was waking constantly thinking about it.”
This individual lost £70,000 to fraudsters who deceived him into purchasing a fake high-interest savings bond, adding, “I felt stupid – as a former solicitor, I thought: what was I thinking? But at the same time it was sophisticated.”
These revelations come as the maximum amount banks are required to reimburse customers who have been tricked into transferring money to fraudsters is set to be significantly reduced.
Another victim lost £240,000 while purchasing a house. He expressed concern, stating, “I do think about it a lot,” and added, “I thank God that this did not occur with a reduced compensation level of just £85,000.”
The regulator is scaling back its plans to refund UK fraud victims, cutting the maximum reimbursement amount by almost 80% from the initially proposed £415,000.
The second victim remarked, “The £240,000 scammed from us was not due to a shady get-rich-quick investment. It was for purchasing a house where we planned to spend our retirement years.”
“To receive only a third of that amount back would have made it impossible for us to be homeowners, which we had been when we sold our house in Wales to move closer to my daughters and grandchildren.”
Consumer group Which? has condemned the change as “outrageous,” warning that it could lead to “devastating financial and emotional harm” for some people.
Rocio Concha, Which? director of policy and advocacy, accused the payments regulator of diluting essential scam protections following “months of lobbying from firms.”
She cautioned, “Reducing the reimbursement limit risks exposing victims of high-value scams to severe financial and emotional distress and also significantly diminishes crucial financial incentives for payments firms to implement effective fraud security measures.
This increases the likelihood that scammers will continue to exploit certain payment platforms.”
