Victims of fraud up to £85,000 will now receive payment within five days under new rules introduced by the UK’s Payment Systems Regulator (PSR).
Voluntary processes to recompensate fraud victims will become mandatory on 7 October, said the PRS, but after objections from the banks the level of compensation has been reduced from £415,000.
Banks will be able to recoup half of the money recompensed from the financial institution used by the fraudster, added the PRS.
They will also have to compensate victims of authorised push payment or APP fraud, in which victims pay for goods that don’t exist or never arrive.
Losses from this type of fraud totalled £460 million in 2023.
In 2023, there were 18 instances of frauds larger than £415,000 and 411 above £85,000, the PSR said.
David Geale, managing director of PSR, said the new rules would help all victims of this type of fraud.
"Whether you get reimbursed and how much can actually depend on who you bank with and that can't be right," he said. "We want to have a consistent experience."
Rocio Concha, Which? director of policy and advocacy, disagreed, commenting that lowering the proposed reimbursement would reduce the incentives for banks and payments firms to take fraud prevention seriously.