In the Queen’s Speech, it is mentioned that the government will bring forward new legislation, a Financial Services and Markets Bill. The briefing pack describes the main elements of the Bill as:
- Revoking retained EU law on financial services and replacing it with an approach to regulation that is designed for the UK.
- Updating the objectives of the financial services regulators to ensure a greater focus on growth and international competitiveness.
- Reforming the rules that regulate the UK’s capital markets to promote investment.
- Ensuring that people across the UK continue to be able to access their own cash with ease.
- Introducing additional protections for those investing or using financial products, to make it safer and support the victims of scams.
More details will be available when the Bill is formally introduced.
In addition, HM Treasury has issued a press release emphasising that the Bill will support consumers by protecting access to cash. The press release also notes that the Bill will enable the Payment Systems Regulator (PSR) to require banks to reimburse authorised push payment (APP) scam losses, totalling hundreds of millions of pounds each year. This will ensure victims are not left paying for fraud through no fault of their own.
HM Treasury has also published a Policy Paper ‘Government approach to authorised push payment scam reimbursement’. The Policy Statement provides that the government intends to clarify in the Bill that, the PSR may use its existing regulatory powers to require reimbursement in cases of APP scams in designated payments systems, including Faster Payments.
Regulation 90 of the Payment Services Regulations 2017 concerns the liability of payment service providers in relation to payment orders. Currently, where a payment is executed in accordance with the unique identifier (e.g. account number and sort code) provided by the customer, Regulation 90(1) states that a payment service provider has correctly executed the payment. The government’s amendment will make clear that this does not affect the ability of the PSR to use its existing regulatory powers in relation to APP scams. This will enable the PSR to establish a liability framework for APP scams using its existing powers, and ultimately improve reimbursement outcomes for victims of APP scams.
The government will also place a duty on the PSR, requiring it to publish a consultation on a draft regulatory requirement within 2 months of the provisions coming into force and then imposing a regulatory requirement within 6 months of the provisions coming into force.
The PSR intends to publish a consultation on its preferred approach to APP scam reimbursement in autumn 2022.