If you used another method to pay a scammer, you may have no protection whatsoever.
Here, we explain why the new fraud reimbursement scheme is an important step forward – but victims still face a reimbursement lottery.
Falling through the gaps
But 41% of victims said that they were tricked into authorising a payment to a fraudster and therefore faced a lottery to get their money back.
They would now benefit from strong protections under the PSRs new mandatory scheme, up to a cap of £85,000.
But victims tricked into sending money to foreign bank accounts (11%) or using cryptocurrency exchanges (17%), digital wallets such as Apple Pay or PayPal (15%), gift cards (6%) and foreign exchange platforms (6%), may have lost everything.
Money sent via these methods usually isn't eligible for compensation via your bank.
Card payment problems
The Financial Ombudsman Service (FOS) recently warned that it has seen a growth in people inadvertently using their credit or debit card to pay fraudsters.
And in many cases, both Section 75 and chargeback are of no use to authorised fraud victims, because scammers typically ask you to first pay a genuine company – such as a cryptocurrency exchange or money transfer app – before the money is moved to an account the criminal controls.
That means the cryptocurrency exchange or money transfer app has provided the intended services, albeit as part of a chain of fraud.
Which? is concerned that many people are unaware of these gaps and is calling for strong protections against fraud no matter how you pay.
Find out more:Take your fraud complaint to the Financial Ombudsman
No matter how you transferred the money, you should still report the fraud and escalate your complaint to the FOS if your provider dismisses your claim.
If, for example, it failed to spot highly unusual and uncharacteristic patterns of spending, you could have a strong case for reimbursement.
And if you've lost more than £85,000 to APP fraud (the reimbursement cap under the new scheme) and your payment provider won't refund the rest, the FOS can look at your claim because it has a compensation limit of £430,000.
Disappointingly, 32% of fraud victims we surveyed this year said they didn’t make a complaint to the FOS because they hadn’t heard of it – the same proportion as our 2022 survey of fraud victims.
Find out more:.source https://www.which.co.uk/news/article/fraud-victims-who-pay-the-wrong-way-could-be-left-with-nothing-asMEN3j2GzR6