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    Fighting authorised push payment scams – Final decision

    11:41, 29/4/2024

    Home » News & Knowledge » Fighting authorised push payment scams – Final decision

    In December 2023, the Payments Systems Regulator issued their final decision which set out the final details of a new reimbursement requirement policy for all payment service providers.

     

    Fighting authorised push payment scams – A new reimbursement requirement

    In June 2023 the Payments Systems Regulator issued a statement (PS23/3) which introduced a new reimbursement requirement within Faster Payments to improve fraud prevention and focus firms’ efforts on protecting customers.

    In December 2023, the final decision was published which sets out the final detailed parameters of the reimbursement policy.

     

    Push payment scams

     

    What does the reimbursement requirement mean?

    In short, it will require payment firms to reimburse all in-scope customers who fall victim to authorised push payment fraud or scams. In most cases, the cost of reimbursement will be 50:50 between the firm sending and the firm receiving the funds.

     

    Who is covered by the new regulation?

    All APP fraud victims who executed their payment over the Faster Payments system are covered by it. This will cover the majority of transfers between UK banks for sums under £1 million.

    The reimbursement requirement will not apply where the victim has committed fraud themselves or where they have acted with exceptional carelessness (this latter negligence requirement will not apply if the victim is deemed vulnerable). The PSR has recently indicated what may be considered as insufficiently careful, this might be:

    • Ignoring their bank’s warning messages
    • Failing to promptly notify their bank of the suspected fraud
    • Refusing to share relevant information with their bank after a reasonable request
    • Not consenting to reporting the incident to the police

     

    When does the reimbursement requirement start?

    The start date for the reimbursement requirement is 7 October 2024. This means that any reimbursable Fast Payments scam payments that take place on or after 7 October 2024 are covered by the reimbursement requirement.

    It appears that the regulation also does not propose to work retroactively. Therefore, reimbursements will not be available under the regulation to those who fell victim to an APP scam before the regulation’s implementation date (set at 7 October 2024).

     

    The full publication can be found here.

     

    Further reading

    Fraud and scam complaints to the Financial Ombudsman on the rise – Oakwood Solicitors

    Financial mis-selling – Oakwood Solicitors

     

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