PSR introduces APP scam reimbursement rules

The Payment Systems Regulator introduced its authorised push payment reimbursement requirement on 7 October 2024, applying to payments made on or after that date¹. The rules place the onus on payment firms to reimburse victims of some APP scams unless the customer has been grossly negligent². The PSR describes the policy as ensuring "victims of APP scams are reimbursed in all but exceptional cases"³.

The protections apply to individuals, microenterprises and charities, and cover UK bank transfers made over Faster Payments or CHAPS¹. All types of payment firm are in scope, including high street banks, building societies, smaller payment firms and e-money firms, as well as firms receiving money on behalf of fraudsters. Credit unions, municipal banks and national savings banks are excluded¹. Card, cash and cheque payments are not covered and have their own protections¹.

Key parameters set by the PSR:

The PSR says customers will not be reimbursed if found complicit in the fraud or grossly negligent, adding that gross negligence is a high bar and the exception does not apply to vulnerable consumers¹. Claims should be reported within 13 months of the fraudulent payment¹. The policy was given effect through three legal instruments: Specific Requirement 1 on Pay.UK, Specific Direction 19 on Pay.UK's compliance monitoring, and Specific Direction 20 on directed payment service providers⁴. Directed firms had to register with Pay.UK by 20 August 2024⁵.

The PSR has said data before and after the policy went live cannot be directly compared, and proposed publishing two reports for 2024³. It also planned a call for views in spring 2025 on future reporting³. Separately, the PSR changed the timing of a consultation on claims management, having planned to consult on regulatory requirements in April 2025; it said it anticipated consulting within three to six months, subject to the government's National Payments Vision⁶. That consultation will not propose mandating firms to use a particular claims management system, and will ask about a deadline for adopting Reporting Standard B by no later than December 2026⁶.

Why it matters for households

Anyone tricked into sending money by UK bank transfer to a fraudster is potentially covered, along with microenterprises and charities¹. The change shifts the starting position: rather than a customer having to argue for a refund, the firm must reimburse unless it can show gross negligence or complicity². Reimbursement is expected within five business days of a claim, extendable to 35 business days where firms stop the clock to gather information¹. Firms may deduct an optional excess of up to £100, but not from vulnerable consumers¹. Claims are capped at £85,000, with cases above that unreimbursed amount able to go to the Financial Ombudsman Service, which has a £430,000 limit¹. If a firm refuses a refund, consumers can complain to their bank and then take the case to the Financial Ombudsman Service¹.

What happens next

The PSR said Pay.UK would continue to monitor compliance with the Faster Payments reimbursement rules in the interim, while the PSR monitors compliance with its legal directions using Reporting Standard A data⁶. The PSR is also considering the impact of the consultation timing change on the collection of sending and receiving firm data for its APP fraud performance data work beyond 2025⁶.