Only four major banks and building societies promise to cover the first £100 lost to fraud under new banking rules introduced this week

Tens of thousands of fraud victims will be denied refunds, it was revealed yesterday.

Just four out of 21 major banks and building societies have promised to cover the first £100 lost to fraud under new banking rules introduced yesterday.

Scam victims face a ‘refund lottery’ as banks and building societies have been given the power to deny refunds on money lost to fraud below £100, according to personal finance website Finder.

Virgin Money, TSB, AIB and Nationwide are the only major firms to have committed to reimburse customers on the first £100 lost to ‘push payment’ fraud, which is where victims are persuaded or tricked into authorising a payment to a fraudster.

Meanwhile, HSBC, First Direct, Lloyds, Halifax and Bank of Scotland are among the banks that will not cover this first £100 of their customers’ losses.

Virgin Money, TSB, AIB and Nationwide are the only major firms to have committed to reimburse customers on the first £100 lost to ‘push payment’ fraud, which is where victims are persuaded or tricked into authorising a payment to a fraudster (stock images)

AIB and Nationwide also cover the first £100 lost to fraud for their customers (stock images)

Long-awaited rules to protect scam victims require banks to repay customers up to a maximum of £85,000 if they have lost cash.

The Payment Systems Regulator dramatically slashed the upper reimbursement cap by £330,000 last month in a U-turn following pressure from ministers and industry bodies.

Customers would have been reimbursed up to £415,000 under previous plans.

But the watchdog has left it to banks to decide if they choose to apply an ‘excess’ of £100 – except for vulnerable customers who must be refunded in full.

Many of Britain’s biggest banks have failed to give clarity, claiming they ‘may’ cover smaller losses or will judge claims based on a case-by-case basis.

Fraudsters stole £1.2billion in 2023 and £460million was lost to APP fraud.

Victims received 62 per cent of losses back in reimbursements and new rules are set to boost the total amount returned to victims.

Losses in around one in three cases of push payment fraud were £100 or less, data from banking industry body UK Finance has found.

Liz Edwards, of Finder, said: ‘Our research reveals the refund lottery that fraud victims are now facing.

‘Based on 2023 fraud figures, more than 58,000 cases would have resulted in no refund if all companies had applied the excess.

‘It doesn’t help that 12 banks said they might apply it – customers don’t know where they stand.’

However, consumers could soon have added protection under proposed new Treasury plans that would give banks the power to extend the time that suspicious payments can be delayed by 72 hours.

This would give them time to intercept suspicious transfers before the money is send to criminals.