New APP payment protection scheme rendered pointless due to fineprint?

Flamebait

I received an email today from HSBC describing the new APP (authorised push payment) protections financial institutions are now required to provide. In a section for "What the new rules won't cover" is this bullet:

• You've ignored warnings provided by us or the police that the payment was likely to be a scam.
  

While that *sounds* like it should be a totally reasonable exclusion, in practice HSBC indicates every transfer to a new payee might be a scam. Every single one. This isn't some intelligent selective warning the banks apply when they've identified an actual risk, it's a boilerplate. By simply warning every transaction might be a scam they seem to have effectively avoided any responsibility on their part. I'm struggling to see what this legislation accomplishes if banks can so trivially limit their liability. What am I misunderstanding?

Voyager2002

Flamebait said:

I received an email today from HSBC describing the new APP (authorised push payment) protections financial institutions are now required to provide. In a section for "What the new rules won't cover" is this bullet:

• You've ignored warnings provided by us or the police that the payment was likely to be a scam.
  

While that *sounds* like it should be a totally reasonable exclusion, in practice HSBC indicates every transfer to a new payee might be a scam. Every single one. This isn't some intelligent selective warning the banks apply when they've identified an actual risk, it's a boilerplate. By simply warning every transaction might be a scam they seem to have effectively avoided any responsibility on their part. I'm struggling to see what this legislation accomplishes if banks can so trivially limit their liability. What am I misunderstanding?

I think there is an important distinction between a warning that a payment "might" be a scam or "is likely to be a scam".

Ultimately this is something that the Ombudsman would have to decide.

masonic

HSBC and other banks do tell customers some transactions are likely to be a scam. This is a level of warning beyond the general ones they use to encourage people to be careful of all new payments.

eskbanker

Flamebait said:

I received an email today from HSBC describing the new APP (authorised push payment) protections financial institutions are now required to provide. In a section for "What the new rules won't cover" is this bullet:

• You've ignored warnings provided by us or the police that the payment was likely to be a scam.
  

While that *sounds* like it should be a totally reasonable exclusion, in practice HSBC indicates every transfer to a new payee might be a scam. Every single one. This isn't some intelligent selective warning the banks apply when they've identified an actual risk, it's a boilerplate. By simply warning every transaction might be a scam they seem to have effectively avoided any responsibility on their part. I'm struggling to see what this legislation accomplishes if banks can so trivially limit their liability. What am I misunderstanding?

Generic boilerplate wording doesn't exempt firms from reimbursing:

The onus is on banks and payment firms to prove where customers have acted with gross negligence, through ignoring specific, tailored warnings or not responding to reasonable requests for information, for example

https://www.psr.org.uk/news-and-updates/latest-news/news/groundbreaking-new-protections-for-victims-of-app-scams-start-today/

Beddie

I agree that banks seem to imply every transaction might be a scam, even one to your own account you've previously used. However, they do throw up more warnings if it's a possible scam, either from where it's being sent to, or if it is an unusual transaction for the particular customer. If a customer ignores these too and goes ahead, then surely that's their own responsibility, not the bank's.

kaMelo

The important word is tailored, general warnings are just that but if a customer ignores a warning tailored to their circumstances then the FOS is less likely to order reimbursement.

This of course relies on the customer giving honest answers when questioned and going off recent decisions the ombudsman seems to have taken a much firmer stance against customers who were less than truthful when questioned on their payments then claim they weren't warned adequately.

DjangoUnchained

It also says about it doesnt cover scams from overseas. i would guess 99 % od scams are from overseas or  hidden to make it look uk based.

friolento

DjangoUnchained said:

It also says about it doesnt cover scams from overseas. i would guess 99 % od scams are from overseas or  hidden to make it look uk based.

The way I understood it is that they exclude scans where you send your money overseas. This would be an exception - in most cases the transfers are to another UK bank account.