On September 25th, the Payment Systems Regulator (PSR) confirmed its decision on the maximum reimbursement limit for victims of Authorised Push Payment (APP) scams. Starting October 7th, victims of APP scams through Faster Payments will be eligible for a maximum reimbursement of £85,000. This decision follows a detailed consultation process, during which feedback from the public and industry stakeholders was considered.
The new reimbursement limit will offer significant protections for individuals impacted by APP scams, covering more than 99% of claims under the Faster Payments system. The decision also serves to incentivise payment firms to continue improving their fraud prevention controls. By setting a clear cap on reimbursement, the PSR aims to encourage innovation and competition within the industry while ensuring that payment systems work efficiently for everyone.
The PSR emphasised that this decision strikes a delicate balance. It offers robust protection for fraud victims, while also considering the regulator’s objectives of fostering innovation and competition in the payment landscape. A detailed policy statement explaining the full reasoning behind this decision will be published next week, providing further clarity to firms and consumers.
Consistency across payment systems
In addition to Faster Payments, the Bank of England, as the operator of the Clearing House Automated Payment System (CHAPS), has also set the same £85,000 maximum reimbursement limit for victims of APP scams. This consistency across both payment systems simplifies the rules for the industry and ensures a unified approach to reimbursement. The Bank of England has stated it will review this limit within 12 months to ensure it continues to meet the needs of consumers and the industry.
What this means for payment firms
For payment firms, this decision means that starting October 7th, they will need to comply with the new £85,000 reimbursement cap for APP scam claims. Firms should take this opportunity to evaluate and strengthen their fraud prevention controls, as the PSR’s requirements are designed to drive improvements in this area. Compliance with these new rules will be key to maintaining trust with customers and upholding industry standards.
At Neopay, we can help your firm navigate the complexities of these new reimbursement rules. Our tailored compliance solutions ensure that your business stays ahead of regulatory changes, minimising risk while maintaining a strong focus on customer protection. Reach out to us for expert guidance on how this change could impact your firm and what you can do to prepare.
