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PSR takes first step in drive to combat APP fraud


The Payment Systems Regulator (PSR) recently published a consultation on two of the draft directions which provide the legal means for implementing its new reimbursement requirements for authorised push payment (APP) scams. This represents the first step in the regulator’s plans for implementing new mandatory reimbursement requirements for victims of APP scams.

Back in June, the regulator set out its requirements for tackling APP scams and improving protections for victims, which include:

  • New rules for Faster Payments, the system across which the vast majority of APP fraud takes place, and moves to strengthen Pay.UK’s ability to tackle fraud
  • All payment firms will be required to take action, with the costs of reimbursement split 50:50 between sending and receiving firms
  • Better protection for customers with consistent minimum standards, with most victims reimbursed within five business days and measures to protect vulnerable customers
  • Clearer guidance for the industry, including on the ability to apply a claim excess and maximum level of reimbursement, which the PSR will consult on later this year.

The PSR said it would seek views on the legal means by which the new changes will be enforced, focusing on the detail of two of the three legal instruments.

The first requirement looks at the rule changes required within the Faster Payments System (FPS), the means by which people can make a payment from one account to another. The second focuses on making sure that Pay.UK, the operator of the FPS, has an effective monitoring regime that measures whether payment firms are consistently complying with the reimbursement requirements.  

The PSR has also published draft details of the general direction that will see all payment firms reimbursing victims of APP scams. This will be consulted on separately in October. The regulator wants these requirements in place for consumers as soon as possible, and proposes an implementation date of 2 April 2024. This is likely to prove a challenging target for firms. The PSR has said it welcomes views on what is required for operational readiness, but that it would not expect implementation to come any later than Q2 2024.