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PSR welcomes today’s publication of an industry code to protect consumers against authorised push payment (APP) scams

Published 28 09 2018

Today, the Authorised Push Payment (APP) Scams Steering Group, established by the Payment Systems Regulator (PSR) earlier this year, has published its consultation on its industry code for the reimbursement of victims of authorised push payment scams.

Authorised push payment scams – where victims are tricked into sending money to a fraudster – are a crime that can have devastating effects on victims. Since 2016, the PSR has been driving forward its plans to make sure consumers are better protected against this type of fraud.

The code, which has been designed to help prevent APP scams and give people better levels of protection, has been developed by representatives from the banking industry, other payment service providers, and consumer groups. It is now open for consultation, including on the areas where the group needs to do more work, such as how consumers are reimbursed when all parties meet their level of care but a fraud still occurs. The PSR expects the steering group to continue to work hard to resolve these issues to deliver a final code in early 2019. Encouragingly, retail banks represented on the steering group have agreed to work towards implementing the standards set out in the draft code to give more people protection.

The steering group is seeking feedback on the industry code by 15 November 2018. The steering group will consider the consultation responses when making any final adjustments to the code, ready for implementation in early 2019.

The PSR’s next steps

In a further move announced today, the PSR has confirmed it plans to consult by December 2018 on using its regulatory powers to give a General Direction to banks and payment service providers to implement confirmation of payee - an important tool for preventing APP scams.

The proposed direction would require banks and payment service providers that are participants in the Faster Payments System to:

  • Be capable of receiving and responding to confirmation of payee requests from other PSPs by 1 April 2019
  • Send confirmation of payee requests and present responses to their customers by 1 July 2019

Commenting on today’s announcements, Hannah Nixon, Managing Director of the Payment Systems Regulator said:

“We have always said that more could be done to protect consumers from this type of fraud – to prevent APP scams from happening in the first place and, if they do occur, to reimburse victims if they’ve done nothing wrong. That’s why, at the beginning of 2018, we established the steering group to develop a voluntary code that would work for everyone, but importantly, give new levels of protection against APP scams that consumers have never had before. The latest data on APP scams proves how important this work is.

“Today’s publication and consultation is a positive step forward. With five of the banks saying they will start to implement the standards, more people will be protected.

“There’s still some important work for the steering group to do, but we are fully supportive of the positive outcomes that the code is designed to deliver.

“We said we would monitor the development and implementation of confirmation of payee, and take action if there was insufficient progress. We believe that more could be done to ensure progress is made more swiftly.  Our General Direction will be designed to give people assurance that the banks and payment service providers will make sure they have confirmation of payee in place in a timely manner. This will help to make sure everyone benefits from the protection it provides.”