PSR outlines new APP fraud reimbursement requirements

APP fraud has quickly become one of the most significant types of fraud, with losses totalling nearly £500m in the last year. The PSR has said the new requirements will “prompt a step change” in the culture of payments to improve fraud prevention.  

As part of this there will be new rules in Faster Payments, while all payment firms will also be incentivised to take action, with both sending and receiving firms splitting the costs of reimbursement 50:50. Additionally, customers will be more protected under consistent minimum standards – with most APP fraud victims being reimbursed within five business days.  

The industry will also have clearer guidance to follow, including around the ability to apply a claim excess and maximum level of reimbursement.  

PSR managing director Chris Hemsley 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.” 

Economic secretary Andrew Griffith added: “This is an important step in the government’s fight against fraud. As payment scams become ever more sophisticated, it is right that the government, the regulator and industry work together to ensure victims are not left out-of-pocket by fraudsters.

  
“In parallel, the government is looking at how to enable banks to have the ability to identify and pause suspicious payments inflight where appropriate.”