The Team

Victims of payment scams now more likely to get their money back
Victims of payment scams now more likely to get their money back

A new voluntary code has been introduced to provide consumers with protection against financial scams. This voluntary code has been introduced to deal with situations where account holders are “conned” or “scammed” into transferring money from their account to the fraudster’s account. These types of payments are called “Authorised Push Payments”.

The new voluntary code comes into effect on 28 May 2019. From that date, if a customer from one of the banks who’ve signed up to the deal falls victim of one of these types of scam, they will be reimbursed in any situation where their bank is at fault and the customer met the standards expected of them in the code.

The code will apply to individuals, micro-businesses (those businesses with less than 10 employees and turnover of €2 million or less) and charities. It does not apply to businesses that fall outwith the micro-business criteria.

There is also specific mention of vulnerable individuals who might fall foul of this type of fraud and that those people should be reimbursed even if they’ve not met the “standards expected” of them as defined in the code.

So, what are the “standards expected”? These are expressed as “exceptions” from normal practice and include (a) the customer failing to take heed of warnings when setting up, and/or amending a payee immediately before payment, (b) the customer failing to take action when receiving a “negative payee result”, (c) where the customer continued to make the payment when there was no reasonable basis for believing the payee was the person the customer was expecting to pay and/or the payment wasn’t for genuine goods and services and/or the person or business who was to receive the money was genuine, (d) where, if the customer is a micro-business of charity, it failed to follow its internal procedures and (e) where there has been gross negligence on the part of the customer.

It will be very interesting to see how this code of practice will be followed and if we’ll continue to see banks failing to reimburse customers who have fallen foul of these scams.

You can view the Code of Conduct by clicking here.