TSB has launched a “fraud refund guarantee” to cover customers that fall victim to any financial scams, including those involving authorised payments.
The bank, which has around 5.2mln customers, said the guarantee would apply to losses incurred by its account holders from 14 April.
At the moment, banking users can usually only claim money back if a fraudster takes it from their account without their knowledge.
If they have been tricked into authorising a transaction from their account to the fraudster, they are less likely to be repaid as they have approved the payment.
According to data from trade body UK Finance, this type of fraud, known as authorised push payment, cost around £354mln in 2018 and affected over 83,800 people.
However, under TSB’s new guarantee customers would still be able to make a fraud claim under this type of scam, although the bank stressed that customers abusing the system by committing fraud on themselves or ignoring safety advice would not be reimbursed.
Richard Meddings, TSB’s acting chief executive, told BBC Radio 5 Live that the new guarantee would offer “piece [sic] of mind to our customers”.
"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".
The guarantee comes as the banking group tries to repair its reputation following an IT meltdown last year that left around 1.9mln customers without access to their accounts.
The debacle resulted in a £330mln hit to the group’s profits, causing it to swing to a statutory loss before tax for 2018 of £105.4mln from a profit of £162.7mln in the prior year, as well as costing it 80,000 customers.