Lib Dems table amendment to close ‘victim-blaming” fraud loophole

by | Dec 7, 2022

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MPs will today debate a Liberal Democrat amendment to close a loophole that would allow banks to refuse to reimburse scam victims.

The Government’s proposals in the Financial Services Bill would let banks continue to deny victims their money back, by claiming that they should have known it was a scam. The Liberal Democrats said that this “victim-blaming is unacceptable” and that the legislation should be strengthened to prevent banks dodging their responsibility.

According to figures from UK Finance, less than half of the money taken through bank transfer scams is reimbursed to the victims: just £271m of £583m in 2021.


The Financial Services Bill would require the Payment Systems Regulator to set rules on reimbursement for this type of scam, but leaves it up to the regulator to decide the extent of those rules. The Liberal Democrat amendment would ensure that banks cannot refuse to reimburse victims on the grounds that they “ought to have known” it was a scam.

Liberal Democrat Treasury Spokesperson Sarah Olney MP said:

“Fraud is an appalling crime that affects millions of people each year, causing enormous financial hardship and distress.


“But this Conservative government simply isn’t taking fraud seriously enough, with far too many criminals getting away with while victims are left out of pocket.

“Far too often, banks refuse to reimburse customers by claiming it was their own fault. This kind of victim-blaming is unacceptable, and a way for banks to dodge their responsibility.

“The Liberal Democrats are demanding that the government close this loophole to ensure victims of scams get the compensation they deserve.”


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