The PSR's Final Stand On APP Fraud Reimbursement
An announcement from the Payment Systems Regulator (PSR) on the 19th of December 2023 has confirmed pivotal changes to the landscape of fraud reimbursement, significantly impacting payment services and electronic money institutions (EMIs) operating in the UK.
The PSR has introduced stringent measures ensuring victims of authorised push payment (APP) scams can claim up to £415,000 as the set maximum reimbursement level. This change is effective from the 7th of October 2024. The new policy aims to boost consumer confidence by swiftly reimbursing the majority of funds lost to fraudulent activities.
Payment firms now face heightened responsibility to prevent fraud. The reimbursement requirement and associated rules are set to incentivise these entities to invest in robust fraud prevention measures as a way to foster a more secure payment environment.
While the maximum reimbursement is set, following industry consultation PSR confirmed that it will allow sending PSPs to levy an excess up to a maximum of £100 per claim. The PSP can decide whether to apply a full excess (£100), a lower excess, or no excess to a reimbursable APP scam claim. However, the excess does not entirely remove the incentive for PSPs to tackle fraud below £100, as vulnerable customers would be exempt from any excess the sending PSP chooses to levy.
Alongside the reimbursement guidelines, the PSR has created an obligation to implement compliance monitoring to ensure adherence to these regulations. This move emphasises consistent compliance and proactive measures from payment services and EMIs.
For payment services and EMI firms, these regulatory changes signal a pivotal shift. There's a heightened emphasis on strengthening fraud prevention measures and adapting to the new reimbursement guidelines. This necessitates proactive collaboration with regulatory bodies, implementation of stronger fraud controls, and a customer-centric approach to security.
With the reimbursement policies coming into effect from October 2024, it's imperative for payment services and EMIs to gear up. Strengthening fraud prevention strategies, aligning with the new reimbursement guidelines, and fostering collaboration with regulatory authorities like the PSR and Pay. UK are crucial steps for a seamless transition.
How Thistle Initiatives help?
Thistle Initiatives has supported principal 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.
As we have dedicated Financial Crime and Payment Services teams, our highly specialist consultants can assist EMIs with both financial crime regulations as well as FCA and PSR compliance.
Contact our specialist lending team now to schedule a free consultation. Get in touch with us by calling 020 7436 0630 or sending an email to info@thistleinitiatives.co.uk.