CP22/4: Authorised push payment (APP) scams: Requiring reimbursement

Date Published: 29 September 2022          Closing Date: 25 November 2022 

Everyone should be able to make payments safely and with confidence. Fraud is the largest contributor to crime in the UK, and authorised push payment (APP) scams continue to have a devastating impact on people who fall victim. The PSR is going further in fighting fraud, by setting out proposals around mandatory reimbursement for victims. 

Why are we publishing this document? 

APP scams happen when fraudsters trick someone into sending a payment to a bank account controlled by the fraudster. In 2021, losses to APP scams totalled £583.2 million, a 39% increase on the previous year. Criminals are getting more creative and sophisticated each day. This affects how and where they target their victims, the methods they use to deceive them, and where the money ends up.  

This means more needs to be done to help fight payment scams. That’s why we are proposing new measures, which would put mandatory reimbursement in place for all online and mobile payments.  

What does this document contain?  

The PSR wants the payments industry to change the way it manages APP scams. The measures being proposed include:  

• Requiring reimbursement in all but exceptional cases – so more victims will get their money back.   
• Improve the level of protection for APP scam victims – so there is greater consistency in protections for all victims, irrespective of who they bank with.   
• Incentivise banks and building societies to prevent APP scams – because responsibility for allowing fraudulent payments is the responsibility of both the sending and receiving banks or building societies.   

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. We want to see the requirements for mandatory reimbursement in place for consumers as swiftly as possible. This consultation will ensure the PSR can make the necessary regulatory changes as soon as the law has been changed, which will allow the PSR to take action. 

We are also leading on a wider set of changes that would:  

• Lead to the publication of data on how well firms are protecting customers from summer 2023.  
• Continue to the widespread rollout of Confirmation of Payee – the name checking service designed to help prevent APP scams and misdirected payments. This would see coverage of this service from around 90% of transactions to almost all payments made by FPS and CHAPS.  
• Support and encourage improved intelligence sharing to spot fraudulent transactions and stop them from happening.   

Who should read this document?

This document is relevant to the payments industry, consumer groups and PSPs, particularly those already involved in our work on APP scams. 

What happens next? 

The consultation is open until 5pm on 25 November 2022. You can email your comments to appscams@psr.org.uk  or write to us at:  

APP scams team  

Payment Systems Regulator  

12 Endeavour Square  

London  

E20 1JN  

We will then consider all the responses we receive to help shape our next steps. 

We are also hosting a virtual roundtable discussion on 13 October to discuss the proposals and you can sign up to attend that discussion on our events page.