Payment Systems Regulator details new requirement for APP fraud reimbursement
The new reimbursement requirement will come into force next year
The Payment Systems Regulator (PSR) published a new policy document ‘PS23/3: Fighting authorised push payment fraud: a new reimbursement requirement’ on 7 June, which details how the new requirement for banks and payment service providers to reimburse the victims of authorised push payments (APP) fraud that occurs within the Faster Payment system will work in practice and the next steps to be taken by the regulator.
The PSR’s new reimbursement requirement, which follows a consultation on the matter, aims to introduce minimum standards for the reimbursement of APP fraud victims. The Financial Services and Markets Bill, which is expected to receive Royal Assent later this year, includes measures to enable the PSR to direct firms to reimburse customers and enforce requirements on payment firms.
Despite the new reimbursement requirement not coming into force until 2024, the PSR expects industry to start working on implementing the new measures now. The regulator has also confirmed that it will consult on a specific start date, the maximum level of reimbursement and the related draft legal instruments, among other things, later in 2023.
Commenting on the new requirement, Chris Hemsley, Managing Director at the PSR, said: “Once implemented, our changes will deliver a major shift from the status quo, giving everyone across the payments ecosystem a reason to act to prevent fraud from happening in the first place. That means everybody who makes payments can do so with much greater confidence, knowing that they will be better protected against fraudsters. In delivering this step-change, the UK will be at the forefront of the fight against APP fraud globally. And by confirming these changes now, it means we will be ready to act once new laws come into effect. We will continue to work with Pay.UK, industry, consumers and organisations beyond the payments sphere to drive effective intervention and start to turn the tide against APP fraud.”