The UK’s Payment Systems Regulator is set to establish a maximum reimbursement limit of £415,000 for victims of authorised push payment (APP) fraud.
In June, the regulator outlined its final stance on addressing APP fraud, ensuring that most victims will receive reimbursement within five days of reporting the incident to their bank. Before these new requirements are implemented next year, the PSR is soliciting feedback on various aspects, including the maximum reimbursement amount, claim excess, and the standard of consumer caution.
Consumers will be expected to take warnings from their banks seriously regarding potential scams, notify their banks within 13 months of the last fraudulent transaction, and provide necessary information for their reimbursement claims. If a consumer is found to be “grossly negligent” by failing to meet any of these criteria, they may not receive reimbursement. The PSR clarifies that this threshold is high and will depend on individual circumstances, emphasizing that gross negligence will not apply in cases where a victim’s vulnerability has contributed to the fraud.
Additionally, the PSR is exploring how a claim excess should be structured, considering options such as a fixed amount or a percentage based on the reimbursement claim. The proposed maximum reimbursement level aligns with the Financial Ombudsman Service’s current limit of £415,000, which covers approximately 98% of APP fraud cases. The regulator is also examining whether this limit will extend to vulnerable consumers.
Chris Hemsley, managing director at the PSR, commented on the upcoming changes, stating, “The changes we are delivering will bring a major shift in preventing fraud, increasing reimbursement for victims, and incentivizing the banks to do more to help their customers.”
Stakeholders have until September 12 to contribute their views, with the new reimbursement standards expected to take effect in 2024.