PSR confirms APP scams reimbursement measures

The Payment Systems Regulator (PSR) has confirmed the maximum reimbursement limit for victims of Authorised Push Payment (APP) scams.

The PSR says that having given careful consideration to all the feedback and information received, the board has decided that the maximum reimbursement limit for Faster Payments will be £85,000.

The PSR’s requirements will provide protections to people who fall victim to scams – with over 99% of APP claims covered by the reimbursement cap. It will also give firms strong financial incentives to continue to make improvements to their fraud prevention controls.

The PSR says this was a carefully balanced decision – which provides significant protection to fraud victims and strikes an appropriate balance having regard to the PSR’s innovation and competition objectives and making sure that payment systems work well for everyone. A final policy statement to explain the reasoning for the decision will be published soon.

The Bank of England, as the operator of CHAPS, has carefully considered the feedback made in relation to CHAPS as part of the same consultation. The Bank has decided that the maximum reimbursement for CHAPS will be £85,000. In making this decision, the Bank has given weight to the benefits to industry and consumers of having consistency of limits across the two payment systems. The Bank is committed to reviewing this limit within 12 months.

PSR Managing Director David Geale said “Whether you get reimbursed and how much can actually depend on who you bank with and that can’t be right. We want to have a consistent experience.”

Richard Carter, CEO of Lenvi said “In 2023 almost £1.2 billion was lost to payment fraud, according to data from UK Finance. This involved nearly three million cases. Fraud in all its forms continues to represent over 40% of reported crime, causing huge damage and suffering.

“It is only by stopping fraud happening in the first place that we will truly protect people. It’s a fight that requires constant vigilance and adaptability, particularly given the threat posed by advancing technologies like AI.

“The financial services sector is at the forefront of efforts to protect customers from fraud, partnering with government and law enforcement. We would urge lenders to combine technology solutions and human expertise. And, perhaps most importantly, there needs to be a willingness at the top of the business to take responsibility for addressing and mitigating fraud risks.”