UK’s Payment Regulator Turns Attention to APP Fraud

The U.K.’s payment regulator has outlined new rules to combat authorized push payment (APP) fraud.

The Payment Systems Regulator (PSR) published new rules for banks and building societies on Thursday (Dec. 8), requiring them to report details about APP fraud, including the rates of APP scams happening at both sending and receiving institutions.

The publication of this data is intended to increase the amount of information available to customers about how well their bank or building society is doing in fighting fraud and reimbursing victims.

“Banks and building societies should be transparent not only about how many of their customers have fallen victim to an APP scam, but also how they have treated those people,” Kate Fitzgerald, the PSR’s head of policy, said.

“As well as giving customers more information to choose which bank or building society they want to use, the publication of this data will encourage banks and building societies to do more to help people. Our package of measures will help to make sure more APP scam victims are reimbursed and further encourage banks and building societies to have strong fraud prevention measures in place,” she added.

Because APP fraud entails victims personally authorizing payments to criminals, under the current law, banks aren’t required to reimburse victims, and initiatives to do so have been voluntary.

However, the Financial Services and Markets Bill, which was debated in parliament on Wednesday (Dec. 7), is set to grant the PSR new powers to define “relevant requirement for reimbursement” that will make banks liable to repay victims of APP fraud (pg. 78).

Learn more: UK Banks Held to Higher Standards as APP Fraud Skyrockets

Although the bill has received cross-party support, the opposition Labour party argued for even stronger protections for consumers, tabling an amendment that would have required the Treasury to publish a national strategy for detecting, preventing and investigating fraud.

While Tory MPs were sympathetic to the idea, the amendment was not ultimately adopted.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.