This follows a super-complaint submitted by consumer group, Which? raising concerns that there is not enough protection for people who are tricked into transferring money to a fraudster - known as an authorised push payment (APP) scam.
Today’s announcement sheds further light on the PSR-specific work, which is just one part of a concerted and coordinated industry-wide effort to tackle APP scams that regulators and industry alike committed to taking forward at the end of last year.
The PSR is now seeking feedback on these draft Terms of Reference, with responses due by 21 March 2017.
Hannah Nixon, Managing Director of the Payment Systems Regulator, said:
'Late last year we found that authorised push payment fraud was a significant problem and so we set out a package of work to help tackle these scams.
'Our proposed Terms of Reference show how we plan to build a clearer picture of the role payment system operators might play in better protecting consumers.
'All along the payments process, action needs to be taken to bolster the level of consumer protection. Detection and prevention is a vital part of combatting fraud and the payment system operators could play an important role in achieving this.'
'From banks and building societies, to payment system operators, businesses and customers themselves, everyone has a part to play if we are to be successful.
Under the proposed Terms of Reference, the work would examine the approaches taken to preventing and responding to push payment scams in other countries, whether lessons can be learned from approaches taken by other payment systems and in relation to other types of disputed payments.
More specifically, the PSR has two objectives in this project:
- To consider whether it would be effective and proportionate for operators of payment systems typically used for push payments to play a greater role in preventing and responding to APP scams. This might be in the form of actions that the operators might take, or new requirements that the operators might place on payment service providers using their systems, for example.
- If the PSR concludes that new measures are appropriate, it will consider whether it would be best to introduce them through regulatory action or via other avenues, such as an industry-led approach. If a new regulatory approach is required then the PSR will develop proposals for consultation.
The PSR expects to report back on its findings in the second half of 2017 and at the same time will give an update on wider progress being made by the other parties involved.
The draft Terms of Reference can be found on the PSR website.
Notes to Editors
1.The PSR was incorporated on 1 April 2014 and became fully operational on 1 April 2015.
2. The PSR is the regulator and concurrent competition authority for payment systems in the UK and all participants in those payment systems (payment service providers, operators and infrastructure providers to those payment systems).
3. The PSR has three statutory objectives:
- to promote effective competition in the markets for payment systems and for services provided by those systems, including between operators, payment service providers and infrastructure providers, in the interest of service-users
- to promote the development of innovation in payment systems, in particular the infrastructure used to operate payment systems, in the interest of service-users
- to ensure that payment systems are operated and developed in a way that considers and promotes the interests of service-users