UK’s PSR sets £415,000 maximum for APP fraud claims


The UK’s Payment Systems Regulator (PSR) has unveiled plans to establish a maximum reimbursement level of £415,000 for victims of APP fraud.

This major decision came after the regulator’s June announcement, where it unveiled its definitive stance on addressing APP fraud.

This decision ensures that a majority of defrauded victims will receive their reimbursements within five days once the fraud is reported to their respective banks. However, before these requisites are officially integrated in 2024, the PSR is currently seeking public and sector-specific opinions regarding the highest permissible reimbursement level, the nature of claim excess, and the expected standard of consumer vigilance.

According to the guidelines on consumer alertness, the PSR expects bank customers to be attentive to any warnings about potential scam risks from their banks. Furthermore, customers must notify their bank within 13 months following the last unauthorised payment and provide all necessary details to assist the bank in assessing their reimbursement claim. There’s a caveat though; if a customer is deemed to have been “grossly negligent” and fails to comply with these standards, they might lose their reimbursement rights.

The PSR stated, “However, gross negligence is a very high bar which will critically depend on the individual circumstances of each case.” They further clarified that in instances where a victim’s vulnerability plays a role in the fraud, the concept of gross negligence would not be applicable.

On the topic of structuring a claim excess, the PSR is debating between two primary models: a fixed sum mirroring traditional insurance claim excess or a fraction of the reimbursement claim’s total value. They also suggested that the peak reimbursement threshold align with the current Financial Ombudsman Service limit, which covers approximately 98% of APP fraud cases. Additionally, they’re examining if this maximum limit will be suitable for vulnerable consumers.

PSR managing director Chris Hemsley said, “The changes we are delivering will bring a major shift in preventing fraud, increasing reimbursement for victims, and incentivising the banks to do more to help their customers.”

All interested parties have until 12 September to contribute their feedback, with these novel reimbursement conditions being instituted in 2024.

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