UK banks and payment firms have reimbursed GBP 173 million to authorised push payment fraud victims in the first year of the Payment Systems Regulator's mandatory reimbursement regime.
Following this announcement, the Payment Systems Regulator (PSR) reported that lenders paid out compensation to 88% of eligible claims during the 12 months ending September 2025, marking a record reimbursement rate. This represents an increase from approximately two-thirds of claims reimbursed in both 2023 and 2024.
The PSR introduced its APP fraud reimbursement regime in October 2024, setting an upper claim limit of GBP 85,000 for fraud compensation. The cap was reduced from an initial GBP 415,000 following industry pushback during the consultation phase.
Quarterly payouts more than double
According to The Banker, the amount paid out under the regime more than doubled from GBP 27.6 million in the fourth quarter of 2024 to GBP 61.1 million in the third quarter of 2025. At the same time, around 188,000 claims out of a total of 269,000 reported to the regulator during the year to September, were deemed eligible for reimbursement under the regime, a decline from the previous 12-month period.
According to PSR's officials, the regulator has not observed significant spikes in claim numbers over the year. The decline in eligible claims has been attributed to the overall improved fraud prevention measures and increased proactive efforts by the industry to block fraudulent transactions before they occur.
Approximately 60 banks and payment firms currently operate under the PSR's regime, as the regulator is expected to publish data later in 2026 identifying which firms pay the largest reimbursement amounts. Moreover, banks and payment firms will have the possibility to reject claims if consumers have not exercised sufficient caution, though such rejections remain low at 3% in the third quarter of September 2025. The PSR stated that the data shows no indication of consumers becoming significantly less cautious, with around 82% of claims being closed within five business days, with nearly all of them being resolved within weeks.
Pressure to reassess liability framework
At the moment, the PSR continues to face pressure to reassess industry liability in APP fraud cases. Multiple financial institutions have also argued that while the sector has invested heavily in fraud prevention, banks should not bear the full cost of what they describe as a shared problem involving multiple industries.
Some UK banks have called for tech firms, telecommunications providers, and social media platforms to be included in the reimbursement framework, arguing that fraud needs to be tackled at its source. Furthermore, regulators have also acknowledged that social media firms and telecommunications companies could implement stronger fraud controls.
The Financial Conduct Authority and the PSR are also reviewing an external assessment that began in October 2025, in order to determine whether changes to the regime are necessary. The review is expected to conclude in the second quarter of 2026.
