£85,000 to be refunded within five days under new Payment Systems Regulators rules for APP scams

The Payment Systems Regulator have introduced new APP fraud re-imbursement protections.

What is APP fraud?

Authorised Push Payment (APP) Fraud is a type of financial crime and happens when individuals are tricked into sending money, under false pretences, to a fraudster via bank transfer. APP fraud is the most common type of financial scam in the UK.

APP fraud losses continue to be driven by the abuse of online platforms used by criminals to scam their victims. These include investment scams advertised on search engines and social media, romance scams committed via online dating platforms and purchase scams promoted through auction websites.

What are the Payment Systems Regulator’s new rules?

The PSR have taken action to make reimbursement mandatory and ensure that customers receive consistent levels of protections in the unfortunate event that they fall victim to APP fraud.

The new protections started on the 7^th October 2024 and apply to payments made on or after this date.

Here are some key points about these protections

• All types of payment firms, including high street banks, building societies and e-money firms will be brought into the new reimbursement arrangements. These firms will be incentivised to stop fraud from happing in the first place, including, for the first time, firms on the receiving end that bank the fraudsters.
• From the 7^th October customers can expect to be reimbursed within 5 business days of making a complaint/claim.
• The measures apply to UK bank transfers – so when money is moved from one UK bank to another over the Faster Payments system or CHAPS. It does not cover other payment methods such as card, cash and cheque as they have their own protections in place.
• There is an optional £100 excess that firms can apply. Each individual firm may choose to apply the excess, chose an alternative excess value up to a maximum of £100 or not to use it at all.
• The maximum amount of money customers can claim is £85,000. This currently aligns with the FSCS limit and will cover 99% of claims. Individual forms may chose to reimburse more than £85,000. Where more than £85,000 is lost and not reimbursed, a customer can escalate their complaint to the Financial Ombudsman Service which has a compensation limit of £430,000.
• The protections apply to individuals, microenterprises and charities.
• Customers will not be entitled to a refund if they are found to have been complicit in the fraud or grossly negligent.

Further information on the Payment Systems Regulator rules can be found here.

Further reading

Bank fraud and scam claims – Oakwood Solicitors

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