PSR sets out its proposals to provide protection against APP scams 

Coming as part of its latest consultation, the move will also see further action being taken to prevent scams from happening in the first place. 

Its focus on APP scams is due to the fact that it’s now the largest type of payment fraud in the UK, with the PSR’s work identifying concerns about outcomes for victims under the current voluntary approach taken by banks and building societies. 

Last November, the PSR consulted on a package of measures to combat APP scams - including reimbursement for victims - with the regulator now consulting on specific proposals that would put that mandatory reimbursement in place for all online and mobile payments. 

In line with protections for other payments and financial services, reimbursement would be on all payments over £100 and subject to an excess of no more than £35. This would ensure the PSR can make necessary regulatory changes as soon as the law has been changed. 

Some of the other measures being proposed include a requirement for reimbursement in all but exceptional cases, so more victims will get their money back, and improvement on the level of protection for APP scam victims so there’s greater consistency in protections for all victims. Additionally, it’s looking to incentivise banks and building societies to prevent APP scams. 

The PSR has said it wants to see mandatory reimbursement requirements in place for consumers as soon as possible, adding protections so that most consumers’ larger payments will be automatically protected. 

PSR managing director Chris Hemsley said: “Fraudsters have continued to devastate the lives of innocent victims through APP scams. 

“We want to see all banks, building societies and other payment providers doing more to prevent APP scams from occurring in the first place. These proposals will mean everyone has more protection from scams.  

“We’ve seen progress over the last few years. Some firms have even gone much further with fraud guarantees, so we know people can be protected effectively. Our proposed rules will see everyone benefiting from strong protections, regardless of who they bank with.”

In addition to preparing the act as soon as it is given the necessary powers, the PSR is leading on a wider set of changes that would - among other things - lead to the publication of data on how well firms are protecting customers from the summer of 2023. 

It would also continue the widespread rollout of Confirmation of Payee - which is a name-checking service designed to help prevent APP scams and misdirected payments - as well as support and encourage intelligence sharing to spot fraudulent transactions and stop them from happening.