The Payment Systems Regulator (PSR) consultation CP23/4 on the draft legal instruments for its authorised push payment (APP) fraud reimbursement requirement closed on 25 August 20231. The regulator said it had published its consultation on two of its draft directions, described as "the legal means to put our new APP fraud reimbursement requirements in place"1.
The consultation followed the PSR's June 2023 policy statement setting out the reimbursement requirement1. The PSR said the policy "sets out a path to reducing the impact of this type of fraud, by making sure more victims of fraud get their money back, but also by prompting a step change in fraud prevention"1.
The two draft directions consulted on cover separate areas:
| Direction | What it covers |
|---|---|
| First requirement | Rule changes needed within the Faster Payments System (FPS)1 |
| Second requirement | Ensuring Pay.UK, the operator of FPS, has an effective monitoring regime measuring whether payment firms consistently comply with the reimbursement requirements1 |
A third direction, described by the PSR as the general direction that "will see all payment firms reimbursing victims of APP fraud", was not part of this consultation and was to be consulted on separately in October1. The PSR said it wanted the requirements in place for consumers as soon as possible and was proposing an implementation date of 2 April 20241.
"This document is relevant to the payments industry, consumer groups, payment service providers, and prospective qualifying customers who use Authorised Push Payments to send money and will be within scope of the policy, once implemented."
Why it matters for households
The requirement is intended to make reimbursement mandatory for victims of APP fraud, where a person is tricked into sending money to a fraudster by bank transfer1. The PSR's stated aim is that more victims get their money back, alongside a change in fraud prevention by payment firms1. The document is relevant to prospective qualifying customers who use Authorised Push Payments to send money and who will be within scope of the policy once implemented1. The PSR proposed 2 April 2024 as the implementation date, meaning the requirement would not apply to payments before that date1. The rules would sit within the Faster Payments System, with Pay.UK monitoring whether firms comply1. The PSR has published its response to the consultation1. Details of the maximum refund under the regime are covered in our guide to the maximum refund for authorised push payment fraud, and the mechanics of how bank transfer refunds work are set out in our guide to authorised push payment reimbursement.
What happens next
The PSR said the third direction, covering the general requirement for all payment firms to reimburse victims of APP fraud, would be consulted on separately in October1. The PSR has published its response to CP23/41. The proposed implementation date for the requirements is 2 April 20241. How consultations of this kind work, and how to respond to them, is explained in our guide to consultations and discussion papers.
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