With £1.2bn having been lost to bank fraud in 2018, TSB has launched a new scheme to safeguard customers against online scammers
TSB branch (Credit: Elliot Brown via Flickr)
UK retail bank TSB has introduced a fraud refund guarantee scheme in a bid to protect its 5.2 million customers against attacks by scammers.
The initiative will provide a safeguard against all types of third-party transactional fraud losses, including unauthorised payments and people being tricked into making payments to fraudsters.
One in four UK customers fell victim to online fraud in 2018, according to figures from payments company Shieldpay, while UK Finance found £1.2bn was lost to bank fraud during the same period.
TSB’s executive chairman Richard Meddings said: “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, and 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.”
TSB fraud refund guarantee aims to provide better fraud protection for customers
Last year, TSB suffered an IT failure which locked thousands of customers out of their accounts for a number of days, leaving them exposed to a high risk of criminal activity.
Around 2,200 fraud attempts were made against TSB account holders during the outage, with more than 1,300 people losing money to scammers as a result.
The incident led to former TSB chief executive Paul Pester stepping down from his role last September.
The bank says UK customers have previously only been refunded for fraud losses in “limited circumstances”, and that its new policy represents a “significant step-change” by committing to refund scam victims for any loss suffered as a result of third-party interference.
The growing trend towards using online channels for banking and retail payments has been accompanied by a heightened risk of fraud, with criminals finding new and inventive ways to target both banks and their customers.
TSB will introduce other initiatives to tackle fraudulent activity, including a multi-million pound investment into fraud detection measures, and working with local police departments.
It will also launch a series of community education workshops that will provide people with the tools and information needed to better protect themselves in this online environment.
Workshops will take place across TSB’s network of branches, as well as separate events in regions including Birmingham, Hull and Bluewater.
The fraud refund guarantee came into effect yesterday (14 April), and TSB will inform customers about its terms in due course.
Retrospective claims from before this date will not be considered for assessment, and all future refunds will be capped at £1m per case.