Credit, Collections & Insolvency News
UK Finance has extended the Authorised Push Payment (APP) C for a further six months until 30th June next year.
A group of seven signatories has agreed to extend the code which compensates eligible victims of APP scams where the customer, sending and recipient banks have met the standards expected of them .
The Code, jointly developed by the banking industry and consumer groups, was launched on 28 May 2019 and sets out increased consumer protection standards to help protect customers from APP Scams. Payment service providers that have signed up to the Code commit to:
The voluntary Code sits alongside industry action to tackle fraud and scams including working closely with the government and law enforcement through the national Economic Crime Plan.
However, as identified by the APP Steering Group that developed the Code there are many situations where both the customer and the banks involved have all met the standards of the Code – often where there are vulnerabilities which lie outside the control of the financial sector which have been exploited by criminals. It is these cases which are funded through the interim funding arrangement.
Since the Code was introduced last year, over £89.2 million has been reimbursed to thousands of customers. The industry is calling for further action to be taken with new legislation to drive consistent outcomes for consumers and firms.
To ensure customer reimbursement takes place whilst regulators and the government deliver a long-term, sustainable funding arrangement, seven payment service providers (PSPs) have provided interim funding since the Code was launched. They have agreed to extend the interim funding arrangements for a further six months until 30 June 2021. This is intended to provide further time for legislation to be agreed and implemented, placing the voluntary Code on a statutory footing.
Katy Worobec, Managing Director of Economic Crime at UK Finance, said “Fraud is a crime which has a devastating emotional impact on victims and its proceeds fund serious criminal activities which damage our society. The industry’s primary focus is therefore on stopping fraud in the first place, supporting the prosecution of criminals responsible and helping customers know steps they can take to stay safe.”
“It is right that those who fall victim to these scams through no fault of their own should be compensated. However, over a year since its launch, the voluntary Code is not working as intended, with a lack of consistency in customer outcomes and a lack of clarity for signatories in how they should implement it.’
“While a long-term, system-wide solution to tackling this threat is developed, the seven Code signatories that have provided interim funding for compensation since launch have therefore extended this temporary arrangement for a further six months. This will give the government time to introduce new legislation and to engage with regulators on a long-term, sustainable funding model and we will continue to work closely with them to do so.”
Under the Code, signatory payment service (PSPs) providers compensate victims of APP fraud provided the customer has met the standards expected of them under the Code. In situations where both the victim and their bank have met the required standards, the customer is compensated for the money lost and the PSP then reclaims the sum from the interim fund.
