The UK's Payment Systems Regulator is planning to protect consumers from 'authorised push payment' scams in which fraudsters trick people into sending them money.
The PSR is consulting interested parties about the establishment of a 'contingent reimbursement model' to compensate victims of fraud in certain circumstances. The expected deadline is September 2018.
In setting up the model, the regulator wants to set out the circumstances in which victims of authorised push payment scams would get their money back, and which bank or payment organisations should pay. It wants to make reimbursement depend on whether the banks and payment organisations had met required standards (such as measures and processes that help them prevent and respond to scams) and whether the victims had also taken care to protect themselves. The compensation model will hopefully help firms comply with the regulator's new 'best practice' standards.
New statistics published by UK Finance show that in the first six months of this year there were 19,000 victims of APP scams involving a total amount of over £100 million.
In September last year, the regulator received something it calls a 'super-complaint' from Which?, the consumer publication, which argued that victims of authorised push payment scams do not receive the same protection from fraudsters that the safeguards in place for other types of payments (such as card payments and direct debits) guarantee.