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FCA reviews firms' anti-payment fraud systems

What has happened? 

In November 2023, the FCA reported that while its multi-firm review1 of firms’ fraud controls and complaint handling (focusing on authorised push payment (APP) fraud) found examples of good practice, the regulator was also disappointed with the way some firms supported customers who were the victims of fraud.  

1 the review used a mixed sample of 12 current account providers, challenger banks and payment firms.

What are the key points of this review?

The FCA believes that with more people potentially vulnerable to fraud due to cost-of-living pressures, and with fraud methods evolving, it is critical that firms continually evaluate their approach to tackling fraud. They must establish strong frameworks for fraud detection and provide efficient support to victims in the unfortunate event of fraud occurrence.

The review found that:

  • Firms can do more to strengthen their systems designed to detect and prevent fraud,
  • There is not enough focus on delivering good consumer outcomes in many firms, 
  • Some firms could do more to improve the support they offer to victims of fraud,
  • Poor complaint handling, including firms often taking too long to respond, was noteworthy, and customers were provided with decision letters that were sometimes unclear, confusing, or included unhelpful and, on occasions, accusatory language and
  • Firms do not fully consider characteristics of customer vulnerability when making decisions about fraud claims and complaints. 

The FCA has explained that it is already working with firms in the reviewed sample to strengthen their approach. It expects all payment service providers to use the review findings to inform what more they can do to detect, manage, and reduce fraud losses more effectively. Customer treatment must also be improved, including complaints handling, to deliver consistently good consumer outcomes in line with the Consumer Duty.

Payment firms should also consider the findings from the recent FCA publication (available at Proceeds of fraud – Detecting and preventing money mules), which reviewed payment account providers’ systems and their controls against money mules’ accounts. 

How can we help you? 

Thistle Initiatives has supported payments firms for over 10 years as a trusted compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in meeting and complying with FCA regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.

Are you looking for help with your payment fraud arrangements, Consumer Duty implementation or more general regulatory questions? Contact our specialist team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to