Financial Services and Markets Bill receives Royal Assent

The Financial Services and Markets Bill received Royal Assent in June 2023, bringing into effect legislation that allows the Payment Systems Regulator (PSR) to require victim reimbursement for authorised push payment (APP) scams¹. The Treasury had announced its intention to legislate for this in May 2022¹.

APP scams happen when someone is tricked into sending money to a fraudster posing as a genuine payee, and can include impersonation or romance scams¹. The PSR cites figures showing £459.7 million was lost to APP scams in 2023¹.

The regulator set out its policy position on the reimbursement requirement in a June 2023 policy statement, followed by a final policy statement in December 2023 that finalised points in the June paper without superseding it¹. Under the requirements, everyone making a payment via Faster Payments or CHAPS from one UK bank account to another will be covered, and sending and receiving firms will split the costs of reimbursement 50:50¹.

The PSR says it is also leading on a wider set of changes: regular publication of data on how well firms are protecting customers; the continued rollout of Confirmation of Payee, the name checking service designed to help prevent APP scams and misdirected payments; and supporting improved intelligence sharing among payment firms to spot and stop fraudulent transactions¹. It says it has collected data showing where APP scams originate, which it will publish later in 2024 to raise awareness of how fraudsters target victims, such as through social media platforms¹.

Why it matters for households

The legislation is what allows the PSR to impose a reimbursement requirement on payment firms, so the practical effect for households runs through the rules the regulator has since made rather than the Act itself. The PSR states that most APP fraud victims will be reimbursed within five business days under consistent minimum standards, with additional protections for vulnerable customers, and that both sending and receiving firms bear the cost equally¹. Coverage extends to payments made via Faster Payments or CHAPS from one UK bank account to another¹.

The PSR states it is unable to investigate individual cases of fraud. It directs victims to contact their bank, building society or other financial organisation first, and says that if they are unhappy with the response they can refer the matter to the Financial Ombudsman Service¹. It also points to Action Fraud, Victim Support and Citizens Advice¹. How the reimbursement rules apply to a particular loss, including the maximum refund for authorised push payment fraud, depends on the PSR's policy statements rather than the June 2023 legislation alone.

What happens next

The PSR says it will publish data on where APP scams originate later in 2024¹. It has not reported in this material a specific date for that publication.