The Payment Systems Regulator has announced the outcome of its consultation on introducing a contingent reimbursement model for victims of authorised push payment (APP) scams. An industry code will be in place by September 2018, paving the way for victims of APP scams to have better protection.
The consultation, which ran from November 2017 to January 2018, gave people the opportunity to provide feedback on the regulator’s plans. It gathered opinions from the payments industry, consumer groups and individuals to make sure the PSR could understand how best to protect people from APP scams.
There is broad agreement that there is a need to better protect people against APP scams and reduce the harm they cause. Now, following consultation, the regulator is driving forward plans to introduce a contingent reimbursement model.
An industry code will be in place from September 2018, which the Financial Ombudsman Service (FOS) can take into account as a relevant consideration when determining new consumer complaints about APP scams. From September the code will be publicly consulted on to be refined in early 2019 and the regulator expects that it will continue to evolve to ensure preventative measures are up to date. For victims of APP scams, this means they can be confident any claim for reimbursement will be given fairer consideration.
The PSR is also bringing consumer and industry representatives together to establish a dedicated steering group. Led by an independent chair appointed by the PSR, the group will ensure the contingent reimbursement model is designed in the best way to minimise the number of scams in the future and protect victims of scams. The steering group will be required to take into account both consumer and industry needs and meet the regulator’s ambitious timescales. The group will start work in March 2018.
APP scams can have a devastating impact on people and this work is about establishing the right incentives for everyone to prevent and respond to scams.
Paul Smith, Head of Policy at the PSR, said “This is about making a positive difference for people to protect them from APP scams. The banks have already made some changes but, from September 2018, this industry code will see better protections available to everyone. We expect the code to evolve over time to make sure methods of preventing APP scams are up to date. By creating this steering group, we are bringing the right people together to put protections in place to prevent APP scams from happening, and reduce their impact when they do happen.”
“This is a complex piece of work and we have set a challenging timeline, but it is essential we see, as soon as possible, a model that is effective in protecting people.”