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The Lending Standards Board (LSB) has made further updates to the Contingent Reimbursement Model Code (CRM Code) in a new bid to clamp down on authorised push payment (APP) scams.
Firms that have signed up to the CRM Code will now be required to up their efforts to prevent APP scams before money is exchanged.
The CRM Code sets out consumer protection standards and has the aim of reducing APP scams.
Signatory firms, including banks such as NatWest, HSBC and Starling, will now be required to go further in identifying new and existing accounts that are at higher risk of being used by criminals.
Firms must, by no later than December 2023, be monitoring the payments that they are receiving to help them identify suspicious inbound payments and accounts that might be being used by scammers.
The LSB, which launched the CRM Code in 2019, believes that new requirements will help firms to stop the onward movement of funds that they believe are linked to scams and to recover the money lost by customers who fall victim to these scams.
“It is essential that firms do all they can to stop criminals from opening bank accounts and using their services to receive scam payments,” said Emma Lovell, chief executive of the LSB.
“Strengthening the code’s provisions means putting in place another tripwire for fraudsters looking to steal people’s savings, not to mention the money needed for essential living costs.”
Lovell also endorsed the Payment Systems Regulator’s (PSR) plans to introduce mandatory reimbursement for victims of scams where more than £100 has been stolen — but added that prevention is also important in tackling APP scams.
“We share the PSR’s drive to ensure more victims are reimbursed where they are not to blame for the success of a scam, but are eager to ensure that fraud detection and prevention continue to be prioritised alongside reimbursement,” said Lovell.
Lovell acknowledged that reimbursement can repair the financial impact on the victim, but it is still very much a lose, lose outcome. “Victims lose because they will feel the after-effects and trauma of being scammed even after reimbursement and society loses as organised criminals reap the rewards of theft.”
“We strongly believe that firms should continue to sign up and adhere to the CRM Code. Scammers aren’t slowing down, and so we cannot take our eye off the ball,” she said. “Only by stopping scams can customers truly be protected. Maintaining an industry code focused on preventing and detecting scams ensures firms have the tools to stop more scams and demonstrates their commitment to good customer outcomes and protections.”
