TSB pledges to refund fraud victims

The "fraud refund guarantee" will cover cases where customers are tricked into authorising payments to fraudsters, as well as unauthorised transactions. The move comes as the bank tries to rebuild its image after an IT meltdown last April left 1.9 million customers unable to access their own money.

Banks have been under pressure to help tackle the rise in sophisticated fraud.

Currently, victims who are tricked into transferring money directly from their account to a fraudster are less likely to be reimbursed, because they approved the payments.

Some £354m was lost last year through this type of scam, known as a "push" or "authorised" payment fraud, according to banking trade body UK Finance.

Financial firms returned just £83m of this to customers.

Examples of authorised payment fraud include fraudsters posing as builders, solicitors, or other contractors who have carried out work for the victim. They submit a fake invoice containing the fraudster's bank details and it is often not easy to spot that they are not the legitimate payee.

'Step change'

TSB said its guarantee - which applies to losses from 14 April - marked a "step change" in the industry, where currently customers were only refunded for fraud losses in limited circumstances.

Under the guarantee, customers will need to contact the bank to report fraud and it will still investigate the fraud claim, including what happened and how, so it can inform customers and ensure they are protected from future fraud.

The bank, which has 5.2 million customers, warned it would not reimburse customers who tried to abuse the guarantee by committing fraud on their own account or by repeatedly ignoring safety advice.

Last month, banks and building societies agreed to do more to protect customers, introducing a new voluntary code which comes into effect on 28 May.

https://www.bbc.co.uk/news/business-47928773