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New fraud refund mechanism could exclude a quarter of victims, warns UK bank TSB

11 ianuarie 2023

TSB is warning that around a quarter (25%)1 of fraud victims could be denied reimbursement under the Payment Systems Regulator’s proposed refund mechanism, due to be introduced next year.

TSB has long-campaigned for higher fraud protections across the banking industry – and in other sectors, including social media and telecoms firms – and largely welcomes proposalsthat will require banks to offer refund standards much closer to TSB’s Fraud Refund Guarantee, introduced in 2019.

However, TSB is now urging the regulator to reconsider plans that would allow banks to exclude refunds to victims of sub-£100 cases – with warnings it could lead to around a quarter of all push payment victims being denied their money back.

By monetary value, cases under £100 account for a small amount of overall fraud losses – at one percent. Yet this equates to a projected £5 million3 stolen from UK households every year on current fraud rates.

TSB is also calling on the regulator to scrap proposals for a £35 excess fee per claim – with concerns the excess would disproportionately impact financially vulnerable people amid a cost-of-living crisis.

Fraud cases under £100 threshold

TSB data4 reveals that Purchase Fraud accounts for over two fifths (44%) of all sub-£100 fraud cases.

Purchase fraud remains a key driver of fraud across the industry – and accounts for two thirds (62%) of all bank transfer cases at TSB.

Alarmingly, over one in 10 (11%) cases under the £100 threshold are victims of Advanced Fee Fraud – a category which typically targets the most financially vulnerable, often by exploiting a fee from victims trying to access loans that simply do not exist. 

TSB found that younger people would be disproportionately affected by the £100 threshold – as over half (52%) of victims within this category are aged 20-40. Over one in six (17%) victims of sub-£100 fraud are over 60.

Social media scams

TSB warns that if a £100 threshold is applied, it would exclude a significant number of consumers who have fallen victim on social media sites, where scams remain rife.

For example, Meta-owned platforms (Facebook, Instagram and WhatsApp) account for four fifths (80%) of all purchase fraud at TSB alone. And UK Finance states that over two thirds (70%)5 of all push-payment fraud starts on online platforms.

PSR consultation & industry refund rate

TSB has submitted evidence to the PSR’s consultation largely welcoming the proposals – but calling for the £100 threshold and £35 excess fee to be reversed – to avoid leaving thousands of victims behind.

The regulator’s consultation on the future of fraud protection is aimed at changing the way the payments industry manages the widespread issue of fraud – today the most common crime in the UK. 

The regulator aims to drastically improve the industry refund rate, which currently sits at 56 percent of losses, under the industry code. In comparison TSB refunds 98 percent of fraud cases under its Fraud Refund Guarantee. 

Paul Davis, Director of Fraud Prevention, TSB said:

We welcome these moves by government and regulators to increase customer protection from Fraud. However, many people simply cannot afford losing £100 to fraud – especially in the current economic climate – and deserve to be protected from increasingly complex scams that often take place on social media sites.

TSB’s Fraud Refund Guarantee has been protecting our customers for nearly four years and currently pays out to 98 percent of fraud victims, including those with losses under £100.


1 Chris Hemsley, Managing Director, Payment Systems Regulator at the Treasury Sub-Committee on Financial Services Regulations, December 2022. Q34: https://committees.parliament.uk/oralevidence/12429/pdf/

CP22/4: Authorised push payment (APP) scams: Requiring reimbursement | Payment Systems Regulator (psr.org.uk)

3 Calculations from latest UKFI fraud data for half year, 2022 – shows that 1% is £2.5 million and therefore £5million should current rates continue over a year.

4 All TSB data relates to analysis of internal customer records

5 UK Finance fraud data, 2021

Fraud Refund Guarantee

TSB introduced its Fraud Refund Guarantee in April 2019 – and has since refunded 98 percent of all fraud cases.

Read more, here: Fraud Refund Guarantee | TSB Bank

YouGov report: Global Future of Financial Services Report, 2022:

Fraud-related findings:

  • 61% of respondents stated the safety and security of their money was the most important driving factor when choosing a financial services company
  • 37% were concerned their financial services company did not have enough fraud protections

Full report: YouGov’s The Future of Financial Services Report 2022

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