UK Regulator Reports 'Broad Support' for Reimbursing APP Fraud Victims
The U.K.’s payments regulator wants banks to reimburse victims of authorized push payment (APP) fraud.
In light of a 40% increase in APP fraud in 2021, regulators in the country have been considering how to grant victims a right to compensation from their bank.
Accordingly, in September, the U.K.’s Payment Systems Regulator (PSR) proposed a new rulebook that would protect consumers against APP scam losses.
In a statement issued on Monday (Feb. 6), the PSR said it has received “broad support for our proposals to make sure people are reimbursed and to improve fraud prevention.” This includes support from a Treasury Select Committee.
The regulator said it will publish its final position in May but noted that “by consulting when it did, the PSR will be in a strong position to make this requirement as soon as possible, after the relevant legislation has received Royal Assent.”
Once the necessary legislation has been passed, the PSR will be responsible for enforcing any new rules and ensuring consumers get reimbursed when they are entitled.
As well as helping victims reclaim their lost money, the new rules will also help hold banks to higher standards when it comes to preventing APP scams. As the PSR statement noted, its proposals intend to “improve the incentives to prevent these frauds from happening in the first place.”
In comments on similar proposals in Norway and other European countries, Taavi Tamkivi, CEO and co-founder of the anti-fraud startup Salv, said “We can argue that it’s not fair for the institutions to take full responsibility for their consumers. I agree, maybe it’s not fair, but at least it brings really good results ... because that hits their bottom line directly.”
When they’re made liable for financial compensation claims, Tamviki said that banks are forced to up their game in the battle against APP fraud and recover lost funds or face having to reimburse consumers.
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