Soon-to-be retired bank transfer scam code has been a success – regulator

The voluntary code is set to be retired when a new mandatory reimbursement code for bank transfer scam victims launches next week.

A voluntary code has helped to push up reimbursement rates when people have been tricked into transferring money to a fraudster (Dominic Lipinski/PA) (PA Archive)

A voluntary code has helped to push up reimbursement rates when people have been tricked into transferring money to a fraudster, according to the body that oversees it.

The Contingent Reimbursement Model Code (CRM code) is set to be retired from Monday October 7, when a new mandatory code comes into effect.

The Lending Standards Board (LSB) oversees the CRM code, which came into force in 2019 and has been signed up to by many banks.

It helps victims of authorised push payment (APP) fraud to get their money back.

The LSB said that 73% of CRM code customers’ APP fraud losses were reimbursed by by payment services providers in 2023. This was up from 23% in 2018, the year before the code’s launch.

The CRM code has been a milestone improvement in customer protections - vastly increasing the chances of customer reimbursement after an APP scam

Emma Lovell, LSB

The average amount of money stolen per reported APP fraud case has fallen from £4,200 in 2018 to £1,600 in 2023 for customers covered by the CRM code.

The code covered more than 90% of reported APP fraud cases in 2023, according to the LSB.

Emma Lovell, chief executive of the LSB, said: “The CRM code has been a milestone improvement in customer protections – vastly increasing the chances of customer reimbursement after an APP scam and having a significant impact on the financial services sector’s efforts to prevent their customers from falling victim to an APP scam in the first place.

“The CRM code’s focus on prevention and detection, in particular, demonstrates what can be done when financial services firms pull in the same direction and opt to go above and beyond statutory requirements.

“Crucially, this focus on prevention not only limits harm to customers but stops money reaching criminals, too. While there is still much work to be done to tackle APP fraud, the CRM code’s signatories have delivered better outcomes for their customers over the last five years. We’re proud of the code’s impact.”

Concerns have previously been raised that banks were applying the code in different ways, leaving some people facing a “lottery” as to whether they would get their money back.

In June 2021, the LSB issued a warning to all code signatories, requiring all firms to improve the consistency when it came to their reimbursement processes, how they identify vulnerable customers, their use of effective warnings, and their record keeping.

The new mandatory code, overseen by the Payment Systems Regulator (PSR) will introduce a maximum reimbursement cap of £85,000.

The previous maximum reimbursement value had been put at £415,000 under the PSR’s plans, but in September it announced the cut, saying it had given “careful consideration to all the feedback and information received”.

Ms Lovell added: “The code has helped slow, but not yet reverse growth in the number of APP scams; now is not the time to lose focus.”