Payment Systems Regulator Proposes Guidance for Supporting Identification of APP Scams and Civil Disputes

The Payment Systems Regulator has opened a consultation on draft guidance to support payment service providers in their assessment of whether an authorized push payment scam claim raised by a consumer is not reimbursable under the reimbursement requirement because it is a private civil dispute. Private civil disputes are not reimbursable under the mandatory reimbursement requirement. They most often involve situations where the consumer has not received good or services, or they are defective in some way, and there is no indication of an intent to defraud on the part of the alleged scammer. The APP reimbursement requirement, which applies from October 7, 2024, obliges PSPs to reimburse consumers when a payment is executed over the Faster Payments Scheme and the payment was executed following fraud or dishonesty.

The PSR's draft guidance sets out a proposed non-exhaustive set of factors a PSP should consider in its assessment, including: (i) the communication and relationship between the consumer and the alleged scammer; (ii) the trading status of the alleged scammer; (iii) the alleged scammer's capability to deliver the goods or services; and (iv) the extent to which the alleged scammer deceived the consumer as to the intended purpose of the payment. The guidance will apply to claims for payments made via Faster Payments and CHAPS.

The PSR expects sending PSPs to take a proportionate approach to validating claims based on the relative complexity and value of the fraud. PSPs are not expected to undertake complex or resource intensive investigations for simple APP fraud claims. Responses to the consultation may be submitted until August 8, 2024.

Return to main website.