In September 2016, the Payment Systems Regulator (PSR) received a super-complaint from the consumer body Which? about protecting consumers from harm caused by authorised push payment (APP) scams. After receiving the super-complaint, the PSR investigated the problem of APP scams and addressed the issues identified through a work programme that included several streams.
The PSR has now published Report and Consultation paper 17/2: APP scams – PSR-led work to mitigate the impact of scams, including a consultation on a contingent reimbursement model (CP17/2). The report explains the progress and outcomes of the work the PSR has done in the past year to reduce the harm to consumers from APP scams. The PSR notes the following:
- the industry has made good progress against the three key areas of improvement the PSR identified in its super complaint response;
- robust and clear statistics have been published that show the extent and nature of APP scams in the UK. More detailed data will be published soon and this will help raise awareness of the problem among industry and consumers;
- the industry has developed and started to implement common standards that should see people with APP scam complaints dealt with more quickly, kept better informed and provide a better chance to recover their money; and
- there has been progress in developing a common undertaking of what information can be shared between payment services providers (PSPs) to help process scam claims. However, the PSR thinks that there is more that needs to be done on information sharing. Addressing this could depend on how legislative proposals develop.
In chapter 6 of the CP17/2, the PSR is proposing to develop a contingent reimbursement model. The PSR considers:
- introducing a contingent reimbursement model that would complement the existing informal arrangements where PSPs voluntarily compensate some victims of APP scams;
- designing and implementing the model, including the PSR’s role in this;
- potential barriers to implementation; and
- other details to consider.
The PSR considers that an effective reimbursement model would give all parties involved (the PSPs and consumers) the incentive to help prevent APP scams, or to respond to one if it occurs where they are placed to do so.
The deadline for comments on CP12/7 is 12 January 2018. If a model is introduced, the PSR plans to implement it by the end of September 2018.
View PSR report and consultation on authorised push payment scams, 7 November 2017