On 9 September 2024, the Financial Conduct Authority (FCA) published a Guidance Consultation, GC24/5, setting out proposed changes to its Payment Services and Electronic Money Approach Document to support new legislation to tackle authorised push payment (APP) fraud.

Background

The Payment Systems Regulator has introduced an APP fraud reimbursement requirement within the Faster Payments System, which will come into effect on 7 October 2024. The requirement will require banks and other payment service providers (PSPs) to reimburse payment service users who fall victim to APP fraud in most cases.

HM Treasury has published proposed amendments to the Payment Services Regulations (PSRs 2017) to enable PSPs to delay making a payment transaction where they have reasonable grounds to suspect fraud or dishonesty, with the aim of increasing firms’ ability to tackle APP fraud while minimising the impact on legitimate payments.

FCA’s proposals

To support this policy, the FCA is proposing changes to the guidance set out in its ‘Payment Services and Electronic – Our Approach’ document (the Approach Document), to explain how PSPs should apply the legislative changes to minimise the impact on legitimate payments. It is also consulting on changes to the Approach Document itself, which explain how the FCA expects PSPs to address suspicious inbound payments while continuing to process payments quickly and efficiently.

Next steps

The deadline for responses to GC24/5 is 4 October 2024. The FCA plans to update the draft guidance following that date to reflect feedback from stakeholders, and to publish a revised Approach Document for payment services by the end of 2024.