The PSR has announced a significant update in the fight against APP scams, revealing a forthcoming adjustment to the reimbursement cap for victims.
Currently set for implementation on 7 October, the new measures aim to bolster consumer protections while balancing the need for market competition and innovation.
In a detailed review of APP fraud cases from the previous year, the PSR identified specific high-value scams that underscore the urgency of enhanced regulatory measures. Notably, there were 18 instances where individuals were scammed out of more than £415,000 and 411 instances involving amounts exceeding £85,000. These figures highlight the sophisticated nature of APP scams, which often involve multiple transactions, thus diminishing the effectiveness of transaction limits.
The PSR, after consulting additional evidence from industry experts and the Financial Conduct Authority (FCA), proposes to align the reimbursement cap with the Financial Services Compensation Scheme (FSCS) limit of £85,000. This adjustment from the previous cap of £415,000 reflects a commitment to protect consumers comprehensively, covering over 99% of claims by volume.
David Geale, the managing director of the PSR, emphasised the regulator’s proactive approach in addressing these concerns. “We listened to concerns about the reimbursement limit and committed to collecting more evidence to inform our approach. As a result, we are now consulting on a limit that still covers the vast majority of authorised push payment scams and strikes the right balance. Under our proposals, consumers in the UK will still receive world-leading protection, payment providers will still be heavily incentivised to improve anti-fraud protections and we maintain effective market competition and innovation,” he said.
The consultation, which is open until 18 September, will be followed by a post-implementation review to ensure ongoing effectiveness and adherence to the new standards by all involved firms. Pay.UK, the operator of the Faster Payments service through which most APP fraud occurs, has confirmed readiness for the 7 October rollout, ensuring a seamless transition to the new regime.
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