Scam victims have been given new protections under reforms that require banks to refund most account holders if they lose money to fraud.

Previously, it was up to banks if they refunded customers who had been scammed, but in a "world first", they must now repay "authorised push payment" fraud victims up to £85,000, said BBC News.

Authorised push payment scams are when criminals deceive victims into transferring them money via a banking app. The changes, launched on 7 October, introduce "world-leading levels of protection" against this kind of fraud, said the Payment Systems Regulator. Banks also now have "strong incentives" to create better ways of preventing scams in the first place. And they'll be able to "delay and investigate payments" for up to 72 hours if they are suspected to be fraudulent, according to HM Treasury.

Authorised push payment fraud is the "most common" type of scam in the UK, said Forbes Advisor. It works by tricking individuals into "sending money under false pretences" from their own account to someone pretending to be an official body such as the bank, police or HMRC. Other common scams are romance scams, where you send money to someone you met online, or pay for goods or services that don't exist. Almost £460 million was lost to authorised push payment fraud in 2023, according to banking trade body UK Finance.

Before the new changes, most banks were part of a voluntary scheme called the Contingent Reimbursement Model, where it was up to banks to refund scam victims, and they could refuse if it was "believed that warnings were ignored", said MoneyWeek. But scammers can be "pretty convincing", so the regulator has stepped in to "further protect account holders" and has made it mandatory to reimburse these fraud victims within five days.

The £85,000 limit will cover 99.8% of cases, said the regulator. It had initially proposed a higher £415,000 limit, said MoneySavingExpert, but this was lowered "amid pressure from the financial services industry". The regulator said it "could reduce investment and risked stifling competition and innovation in the market".

Banks can also charge up to a £100 excess for each claim, although not to customers deemed vulnerable.

The new rules mean banking customers will be "more protected under consistent minimum standards", said the regulator. Financial brands will also be more incentivised to "develop better systems" to spot and stop fraud, said lawyers Farrer & Co.

But, "sadly", the upper claims limit will leave victims of "high-value scams" unable to reclaim losses, said Which?. Banks can also reject your claim if they can show you have been "grossly negligent", added MoneySavingExpert, but this may only happen in a "small minority of cases".

There are also warnings about banks being able to hold suspicious payments for 72 hours, said property magazine The Negotiator, as this means "large-scale transactions in property purchases could be regularly blocked". Estate agency trade body Propertymark said it will be watching for "unintended consequences" from the anti-fraud measures.