The consumer group Which? filed the first super-complaint to the Payment Systems Regulator (PSR) on 23 September 2016. The consumer group is calling for banks to take greater responsibility in protecting consumers from fraudulent bank transfers. Which? has the power to make this type of complaint as it is a designated representative body under section 68(1) of the Financial Services Banking Reform Act (Designated Representative Bodies) Order 2016. The group also flagged the complaint with the Financial Conduct Authority (FCA).

What this means for you

Consumers currently have no legal right to claim money back from their bank if they are tricked into making a transfer to a fraudulent individual. This is inconsistent with many other payment types where banks reimburse customers who suffer financial losses due to scams via direct debit, credit cards or fraudulent account activity.  The investigations of Which? have revealed that 60% of customers were unaware that they have no protection from their bank in these circumstances.

Which? have called for the regulators to: 

  • formally investigate the scale of bank transfer fraud and how much it is costing customers; and
  • take action and propose new measures and greater liability for banks to ensure consumers are better protected when they have been tricked into making a bank transfer.

The PSR must respond to the super-complaint within 90 calendar days. In the meantime, the PSR is examining Which’s evidence and gathering/examining its own evidence. It will also be working closely with the FCA and other relevant organisations. Possible outcomes include but are not limited to: 

  • regulatory action by the PSR;
  • launching investigations into anti-competitive conduct of a participant;
  • launching a market study;
  • initiating a review of relevant directions, requirements or guidance;
  • referring the complaint to another authority; or
  • deciding that no action should be taken.