New APP fraud measures begin

Today (7th October, 2024) marks the start of major new protections for victims of Authorised Push Payment (APP) scams. APP fraud happens when someone is tricked into sending money to a fraudster via bank transfer, which can lead to devastating impacts on its victims and reduce consumer confidence when making payments.

Payment firms are now required to follow the new reimbursement arrangements. This includes high street banks and building societies as well as smaller payment firms, and e-money firms. The changes require banks to repay customers who are not at fault within five business days, with a reimbursement limit set at £85,000.

Under the PSR’s new rules, people making payments from one UK account to another using the Faster Payments system (the system used for mobile and online banking) or CHAPS system (the UK’s high value payment system used for some consumer payments such as house purchases) will now benefit from high levels of protection against APP fraud.

Rocio Concha, Which? Director of Policy and Advocacy said “For too long, victims have been at the mercy of a reimbursement lottery depending on who they bank with. From today, this new scheme should ensure the vast majority of victims are reimbursed and treated in a fair and consistent way if they fall victim to this terrible crime.

“Which? has concerns about the regulator’s decision to weaken the scheme at the eleventh hour by slashing the maximum reimbursement limit, which reduces the incentive for banks and payment firms to take fraud seriously.

“We expect the regulator to closely monitor the protections that individual payment providers put in place to stop scams and be prepared to intervene and increase the threshold.”

Ben Donaldson, Managing Director for Economic Crime at UK Finance said: “Reimbursement is important, but it does nothing to prevent or reduce the psychological harms.” The Payment Systems Regulator oversees these new rules, which apply to over 1,500 payment systems providers.”

David Geale, Managing Director of the Payment Systems Regulator, said “Today is a very important day in making it quicker and simpler for victims of APP scams to get back money they’ve lost to criminals, with a guaranteed minimum level of protection in place.

“But not only that, our new requirements will see all payment firms involved facing strong incentives to introduce more robust ways of identifying and preventing these scams from happening in the first place. Firms have already made a good start in making changes and we expect to continue seeing new and innovative systems being rolled out to drive fraud out of our payment systems.”