Payments firms are urging a reevaluation of the UK’s plans to protect victims of APP fraud, expressing concerns that a refund cap of £415,000 could negatively impact smaller providers.
APP fraud has rapidly emerged as one of the most prevalent forms of fraud in the UK, resulting in nearly £500 million in losses last year. Consumer advocacy groups and politicians have been pressing banks to address this escalating issue and expedite reimbursement for innocent victims.
Starting in October, the Payment Systems Regulator (PSR) is set to implement a “step-change” in fraud protection, which aims to ensure that the majority of funds lost to APP frauds will be reimbursed to victims. However, the PSR has established a maximum reimbursement limit of £415,000.
In response, the Payments Association has contacted the Economic Secretary to the Treasury, Bim Afolami, to express their opposition to the cap, labeling it as “simply not proportionate,” according to Bloomberg.
The letter, signed by approximately 30 firms, advocates for a cap of £30,000, reflecting the average loss from APP fraud. Additionally, it raises concerns that the reimbursement systems may not be adequately prepared by the upcoming October deadline.