On 6 March 2023, the Treasury Committee published a report in which it criticised new proposals to reimburse fraud victims. The Committee states that the implementation of mandatory reimbursement plans has been ‘painfully slow’ and also objects to new proposals by the regulator which would hand the refund process to an industry body, Pay.UK.
New financial regulations being considered by the Payment Systems Regulator (PSR) will require banks and building societies to fully reimburse victims of authorised push payment (APP) scams where the loss is over £100.
Last month, the Treasury Sub-Committee on Financial Services Regulations, which scrutinises regulatory proposals, questioned why fraud under £100 would not be refunded. In a response, published today, the PSR revealed that 24 per cent of all APP scams were for transactions less than £100.
In response, the Chair of the Treasury Committee, Harriet Baldwin, said:
‘Fraud is on the rise and our constituents are being robbed. Regulators need to get their skates on and sort out all of these exclusions and criteria quickly. Our Committee will keep up pressure so that implementation is not dragged or half-baked.’
In its report, the Committee recommends that:
- the system for mandatory reimbursement should be fully implemented by the end of 2023; and
- the PSR should use its own powers as a regulator to direct banks and other payment service providers to reimburse victims of APP fraud, rather than asking Pay.UK to make, maintain and enforcement reimbursement rules.