TSB has announced a first of its kind Fraud Refund Guarantee, which will refund customers who fall victim to fraud.
Customers of the bank who fall prey to unauthorised transactions on their accounts, or those tricked into authorising payments to fraudsters will be covered by the bank’s new pledge.
The bank said the announcement marks a “significant step-change” in banking, where usually, customers are only refunded for fraud losses in limited circumstances. In the long term, TSB said that customers will be refunded for any loss they’ve suffered from their account as a result of third-party fraud.
The move comes as the bank tries to rebuild its reputation following a disastrous IT meltdown last year, which left nearly two million customers unable to access their own accounts. The turbulent period came to a climax when chief executive, Paul Pester, resigned amid claims that he misled MPs over the severity of the incident.
TSB Executive Chairman, Richard Meddings, commented: “The vast majority of fraud claims across UK banking are from innocent victims of fraud, who have been targeted by criminals and organised gangs. However, all too often these customers must fight to be refunded and are not treated as victims of crime.
“We want to provide peace of mind to our customers, that’s why we’re proud to announce the TSB Fraud Refund Guarantee. If a TSB customer innocently suffers a fraud loss on their account after being targeted by a criminal, we’ll cover it.”
Bank fraud is a rapidly growing problem for consumers across the UK, and banks have been urged to act on the issue. Sophisticated methods employed by cyber fraudsters led one-in-four people in the UK to fall victim to online fraud last year. Statistics published by UK Finance also show that more than £1.2 billion was stolen by criminals committing bank fraud last year.
“Push” scams, which involves tricking consumers into authorising payments is believed to have cost more than £350 million last year, according to UK Finance. Conversely, only £83 million was returned to customers by financial firms.
TSB said its Fraud Refund Guarantee is just “one of the many ways” that the bank is tackling the issue of fraud, and it intends to take a targeted approach to combat the issue. Measures include:
- “Prevention through increased fraud education reaching local communities right across the UK;
- “Protecting customers through multi-million-pound investment in fraud detection measures; and
- “Pursuing fraudsters by partnering with local police forces to hunt down the criminals that target consumers.”