Starting from October 7, UK banks are implementing a new compensation scheme aimed at addressing bank fraud, which could involve a £100 charge on victims. While some banks have agreed to this, others are still undecided.

This initiative aims to protect those deceived by fraudulent entities posing as officials from organizations like HMRC or the police. The main objective is to safeguard innocent individuals from monetary loss.

Approximately 200,000 people in the UK fall victim to Authorised Push Payment (APP) scams every year, incurring significant losses, including an estimated £460 million in 2023. A £100 charge could potentially nullify compensation for many victims.

Information from UK Finance shows that 32% of these fraud cases involve sums of £100 or less. As banks decide their next steps, they need to inform clients about their specific policies.

TSB, Nationwide, Virgin Money, and others have chosen not to implement this fee, while NatWest plans to review these cases individually, potentially imposing a £100 charge.

Metro Bank and other payment services intend to adopt the entire £100 charge, though it is not applicable to customers deemed vulnerable.

TSB's Nicola Bannister highlighted that a significant portion of fraud cases involve relatively small amounts, emphasizing the financial impact on affected individuals. She urged banks to clarify their excess fee policies.

Other banks, including Barclays, Lloyds, and HSBC, are yet to announce their policies but will update clients before the regulations take effect.

UK Finance reports a 12% increase in push payment fraud cases year over year, with a reimbursement rate of 62% as banks voluntarily returned £287 million to victims.

Rocia Concha from Which? critiqued the changes, arguing that reducing the reimbursement cap might diminish the motivation for banks to prevent fraud.