Payment scams, including mortgage frauds, are to be investigated.

The Payment Systems Regulator has published its draft terms of reference outlining how it intends to review whether the operators of CHAPS and Faster Payment Schemes need to play an expanded role.

This follows a super-complaint submitted by Which? raising concerns that there is not enough protection for people tricked into transferring funds to a fraudster.

Hannah Nixon, managing director of the Payment Systems Regulator, said: “Detection and prevention are a vital part of combatting fraud and the payment system operators could play an important role in achieving this.

“From banks and building societies, to payment system operators, businesses and customers themselves, everyone has a part to play if we are to be successful.”

In a typical mortgage fraud, buyers can lose huge sums of money after the fraudsters typically hack into either the buyer’s email or into their conveyancer’s email, assuming one or the other’s online identity.

The funds are then diverted to the fraudsters’ own bank account.