HSBC issues warning over APP new rules

HSBC has backed calls for tech firms to help cover the cost of fraud, saying incoming compensation rules will not be enough to prevent scams. The Payment Systems Regulator (PSR) is expected to make reimbursement of up to £85,000 mandatory from 7th October with most firms having failed to sign up to, or consistently apply, a voluntary industry code introduced in 2019.

The bank says new UK compensation rules will fail to curb APP scams and prove financial sector is not the problem as it throws its weight behind calls for tech firms to pay up for fraud.

The Government has yet to crack down on tech and social media firms, instead asking them to sign up to a voluntary online fraud charter. Data from UK Finance shows that losses linked to authorised push payment fraud totalled £459.7m in 2023, with the total number of cases hitting 232,429.

David Callington, Head of Fraud at HSBC  “The wider ecosystem, and key players in that ecosystem, have to be held to account.

“While banks needed to be vigilant, the financial obligations need to sit with those other sectors as well. They need the financial incentive.

“What we would urge for is a shifting of some of those obligations into regulation, so there is an actual obligation on other sectors who are part of the ecosystem to take action and protect what are our common customers, our common users.

“However, regulators will only step in when they see that actually there’s not enough traction on preventing fraud, and we’re not generating the outcomes that we want from the voluntary aspects that have been put in place.”