On 15 August 2023, the Payment Systems Regulator (PSR) published two consultations in the lead up to its new authorised push payment (APP) fraud reimbursement requirements.

Consultation on consumer standard of caution

The first consultation proposes that the consumer standard of caution should consist of the following three things:

  • A requirement for consumers to have regard to specific directed warnings given by their bank, which makes clear the intended recipient is likely to be a fraudster.
  • A prompt reporting requirement where consumers who are, or suspect they are, a victim of an APP scam should notify their bank promptly and, in any event, not more than 13 month after the last fraudulent payment was made.
  • An information sharing requirement where consumers should respond to any reasonable and proportionate requests for information made by their bank to help them assess a reimbursement claim, or to determine if a consumer is vulnerable.

Consultation on the maximum level of reimbursement and claim excess

The PSR is seeking views on the most appropriate way of structuring a claim excess. This includes whether an excess should be a fixed amount or a percentage of the reimbursement claim amount.

The PSR also proposes that the maximum reimbursement level should be in line with the prevailing Financial Ombudsman Service limit of £415,000 per claim, which is around 98% of APP fraud falls within. The regulator is also consulting on whether the maximum level will apply to vulnerable consumers.

Next steps

The deadline for feedback to both these consultations is 12 September 2023.

In October, the PSR will consult on the draft general direction which will be given to all payment firms, requiring reimbursement for APP scams victims.

By the end of 2023, the PSR will publish the claim excess and maximum level of reimbursement, additional guidance on the consumer standard of caution (gross negligence) and all legal instruments.

In 2024, the new reimbursement requirement will come into force.