.svg)
žž’s global roundup of imperative regulatory developments. Your lowdown on what the world’s regulatory leaders are up to this month.
The Payment Systems Regulator (PSR) has published its, pointing out key areas of focuspayment service providers (PSPs) must prepare for by October 7, 2024, when the reimbursement requirement will enter into force.
The big picture
occurs when a victim is tricked, by way of manipulation, deceit or persuasion, into sending money to a fraudster’s account.
data demonstrates the impact of APP fraud, whichaccounted for a total of 232,429 out of 2,967,363 fraudulent transactions in 2023,valuing £459.7m (out of the total value of £1168.4m). It is worth noting that although APP fraud value decreased by 5 percent, the number of transactions increased by 12 percent in comparison to 2022. 62 percent of all APP losses, corresponding to a total of £287.3m, were returned to victims in 2023, an increase of 1 percent from 2022.
To ensure efficiency in reducing APP fraud levels, the PSR introduced the reimbursement requirement. In a nutshell, the provides for the following measures:
- Reimbursement timeline: APP fraud victims from when the victim makes an FPS APP scam claim to the sending PSP, unless the sending PSP exercises the “stop the clock” provision. can be used by the sending PSP to pause the five business-day reimbursement for specific reasons, such as gathering additional information in relation to the claim.
- Receiving PSP payment: When requested by the sending PSP, of the amount the sending PSP has paid to the victim or the required reimbursement amount, whichever is lower if the amounts differ.
- Caution exception: PSPs are not required to reimburse any FPS APP scam payments where the exception applies. This exception does not apply if the victim was a and they did not have the ability to protect themselves from fraud when they made a FPS APP scam payment.
- Claim excess: Sending PSPs may apply a single to each FPS APP scam claim.
- Maximum reimbursement threshold and claim timeline: is £415,000. PSPs can refuse to reimburse amounts exceeding this threshold or frauds after the date of the final FPS APP scam payment of the claim.
To ensure compliance with the reimbursement requirement, in December 2023, following consultations the PSR issued the following directions and requirements:
- : Requiring publication of information relating to APP scams.
- : Directing Pay.UK to create and propose its plans for an effective compliance monitoring regime for APP scams reimbursement.
- : Containing the APP scams reimbursement requirement and directing in-scope PSPs to comply with the reimbursement rules.
- : Requiring Pay.UK to create the APP scams reimbursement rules.
Why should you care?
The letter outlines the three key areas for firms to focus their implementation activities over the coming months to ensure complianceby October 7, 2024:
- Applicability:All PSPs participating in FPS will need to consider whether the requirements apply to them, either as a sending PSP or as a receiving PSP providing a relevant account to a service user. The requirements apply to both direct and indirect participants of the system.
- Reimbursement claim management system (RCMS) registration:Pay.UK has procured the RCMS, a central system to enable firms to communicate with each other and manage APP scam claims. It will further allow firms to report data to Pay.UK so it can monitor and manage firms’ compliance with its FPS reimbursement rules.Firms will need toregister with Pay.UK as soon as possible, andnot later than August 20, 2024. Additionally, the PSR encourages firms to attend Pay.UK’s engagement sessions.
- Transparency in consumer communication:Firms will need to betransparent in communicating reimbursement requirements to consumers and take proactive steps to notify them of the protections available.
As a compliance failure, makes a party liable to regulatory sanction.
