Banks could soon be CHARGING customers to transfer funds over £30 in controversial new plan
28 August 2019, 17:06 | Updated: 28 August 2019, 17:17
The new charge would come as part of a move to help fund fraud compensation.
Banks could potentially start charging their customers for any transfers that exceed £30 under some new plans which look to fund the fraud compensation schemes.
The rather out-there plans have been proposed by a payment scheme service provider, Pay.UK on behalf of UK Finance, and would see banks paying a transaction fee per transfer over £30.
READ MORE: Apple's top tips for keeping their new credit card clean - avoid leather and more
This proposal states that it would be a 2.9p charge per transaction, and that it could have the potential of being passed on to the different banks' customers.
All funds raised through the new transaction charges would all contribute towards a huge central fund that is used to pay out the compensation to any victims of fraud with that particular bank.
In May, new rules were introduced to banks, which means they now need to pay out if customers mistakenly transfer money to fraudsters.
This is what brought on the proposal - as these kinds of fraudulent transfers are the kind where the customer authorises the transfer, rather than money being stolen by fraudsters in an authorised way. It's called the Authorised Push Payment (APP).
Before these new rules were put in place back in May, banks only had to pay out to the victims of unauthorised scams - such as when the victim's credit card was physically stolen.
However, now banks could potentially charge customers a transfer fee to make up the money needed for those payouts.
Gareth Shaw, head of money at Which?, said: "It is vital that a long term sustainable "no-blame" reimbursement pot for scam victims is established quickly, and it should be collectively funded by the banking industry.
"However, it must not lead to banks directly passing fees on to their customers, who shouldn't be left footing the bill for this crime."
These proposed plans to charge for transactions over £30 are currently in a consultation period until October, and then a decision should arrive in November.
Eric Leenders from UK Finance, which represents the banks, said that the proposed new scheme will "provide long-term, sustainable funding" for reimbursing fraud victims.
He added: "Criminals are indiscriminate, often using information stolen in data breaches to make their scams seem genuine.
"This funding system will effectively serve as a centralised insurance policy which would fairly distribute the risk from fraud across the industry, while supporting new firms entering the market."
