The UK PSR speeds up regulation for APP scams protection

Friday 7 October 2022 14:42 CET | News

The UK Payment Systems Regulator (PSR) has announced it intends to speed up the coming into force of requirements for mandatory reimbursement for consumers.


The PSR published its latest consultation that will usher in greater protections from Authorised Push Payment (APP) scam losses and will see further action being taken to prevent scams from happening in the first place.  

In November 2021, the PSR consulted on a package of measures to combat APP scams, including mandating reimbursement for victims. The PSR proposes to allow Payment Service Providers to have a minimum threshold for a reimbursement claim (of no more than GBP 100); withhold an ‘excess’ (of no more than GBP35); and set a time limit for claims (of no less than 13 months). According to the regulator, these options may help PSPs ensure their customers take care in making small payments, minimise claims for civil disputes and maintain proportionate costs, while protecting consumers appropriately.


The UK Payment Systems Regulator (PSR) has announced it intends to speed up the coming into force of requirements for mandatory reimbursement for consumers.


Focus points of the PSR consultation

The PSR wants the payments industry to change the way it manages APP scams. The measures being proposed include: 

  • Requiring reimbursement in all but exceptional cases – so more victims will get their money back.  

  • Improve the level of protection for APP scam victims – so there is greater consistency in protections for all victims, irrespective of who they bank with.  

  • Incentivise banks and building societies to prevent APP scams – because responsibility for allowing fraudulent payments is the responsibility of both the sending and receiving banks or building societies. 

Institutions contributing to the PSR consultation and timeline

In May 2022, the British Treasury announced its intention to allow the PSR to require victim reimbursement for APP scams. The legislative changes are part of the Financial Services and Markets Bill and will include a duty that will require the PSR to implement measures within six months of the new laws coming into effect.

The regulator is reportedly working with Pay.UK – the operator of the Faster Payments system – in order to make sure its requirements can be implemented immediately after law is passed. 

According to the PSR, fraud is the largest contributor to crime in the UK, and APP scams are rising quickly. They are now the largest type of payment fraud, both in the number of scams and the value of losses. In 2021, losses to APP scams totalled GBP 583.2 million, a 39% increase on the previous year. Many cases go unreported, so the real figures are likely to be higher. Of these reported cases, currently only 46% of total APP scam losses are reimbursed to the victim. 

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Keywords: regulation, APP fraud, fraud detection, online fraud, online payments
Categories: Fraud & Financial Crime
Companies: Payment Systems Regulator
Countries: United Kingdom
This article is part of category

Fraud & Financial Crime

Payment Systems Regulator

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