The PSR (Payment Systems Regulator) has published its latest consultation on protections from Authorised Push Payment (APP) scam losses. The PSR proposes reimbursement in all but exceptional cases. Payment Service Providers (PSPs include banks and building societies) would have a minimum threshold for a reimbursement claim (of no more than £100); withhold an ‘excess’ (of no more than £35); and set a time limit for claims (of no less than 13 months).
Chris Hemsley, Managing Director at the PSR 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 benefitting from strong protections, regardless of who they bank with.”
Reimbursement for APP scams is voluntarily applied by signatory firms under the Contingent Reimbursement Model Code (CRM), which is overseen by the Lending Standards Board. Ten banks and building societies have signed up. The PSR describes APP scams as 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 £583.2m, a 39 per cent increase on the previous year. Many cases go unreported.
Comment
Mike Haley, CEO of the counter-fraud trade body Cifas said: ‘These proposals highlight the critical importance of integrating fraud checks within the customer journey, as well as the effective sharing of data between organisations to prevent crime and protect victims.
‘Fraud is on the rise, and already this year we are seeing cases filed to the National Fraud Database rise almost twenty percent when compared to 2021. Undoubtably, the current economic crisis will create new opportunities to commit fraud, and so I expect we will see many more members of the public targeted by criminals intent on stealing money and personal information.
‘By sharing fraud data, our members prevent over £1bn each year being lost in fraud to organised crime and criminals. We continue to work to make an even greater impact on fraud and financial crime by creating new solutions that will better scrutinise payments, protect consumers from APP scams and prevent these losses before they occur.’
