A quarter of fraud victims could be denied reimbursement under Payment Systems Regulator’s (PSR’s) proposed refund mechanism, British bank TSB has warned.

The PSR’s new plans to allow banks to adopt a £100 threshold for reimbursing victims of fraud are set to be implemented in 2024. The bank however has urged the PSR to reconsider these plans with warnings that it could lead to 25 per cent of all push payment victims being denied their money back, with people aged 20-40 accounting for over half of such cases.

The bank is also calling on the regulator to scrap proposals for a £35 excess fee per claim, which it said will penalise the most vulnerable during a cost-of-living crisis.

TSB’s data shows that Purchase Fraud accounts for over two fifths (44 per cent) of all sub-£100 fraud cases, One in ten such cases that fall under the threshold are classified as victims of Advanced Fee Fraud, defined as when fraudsters target victims to make advance or upfront payments for goods, services and/or financial gains that do not materialise.

The bank also said that the threshold would exclude victims of fraud on social media, where fraudulent activity is rife. TSB said that Meta-owned platforms (Facebook, Instagram and WhatsApp) account for four fifths (80 per cent) of all purchase fraud at the bank.

Overall, TSB has welcomed the proposals but has called for the £100 threshold and £35 excess fee to be reversed.

Paul Davis, director of Fraud Prevention, TSB said: “We welcome these moves by the 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.”

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