UK’s PSR mandates “guaranteed minimum level of protection” against APP scams
The Payment Systems Regulator (PSR) has introduced new measures to better protect consumers using the Faster Payments or CHAPS systems to transfer funds between UK bank accounts.
PSR issues reimbursement mandate for APP scams
Effective 7 October, the provisions apply specifically to authorised push payment (APP) scams and introduce new reimbursement arrangements for payment firms, including high street banks and building societies.
These include guaranteed reimbursements within five business days of a claim being made, with the regulator stating that the rules cover “over 99% of claims by volume”.
Reimbursements will be covered up to £85,000 as standard, although higher amounts can be claimed either through the payment firm or via the UK’s Financial Ombudsman Service, which can make rulings up to £430,000.
The provisions will also see more firms using Confirmation of Payee (CoP) to authenticate transactions between bank accounts, with the PSR stating that over 350 more firms are to adopt the service by the end of this month as a result of its latest action.
The regulator says it will now be “closely monitoring” how the measures impact APP fraud and will undertake an evaluation of their effectiveness after 12 months of operation.
PSR MD David Geale, appointed in June, asserts that the new provisions will make it “quicker and simpler for victims of APP scams to get back money they’ve lost to criminals”, installing a “guaranteed minimum level of protection”.
“Firms have already made a good start in making changes and we expect to continue seeing new and innovative systems being rolled out to drive fraud out of our payment systems.”
