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PSR has advised UK banks to compensate customers who have been the victims by APP (authorized push payment) scam.
On Thursday, the Payment Systems Regulator advised the banks to reimburse those customers who have been tricked through Britain’s largest type of payment scam, “authorized push payment” (APP). The regulatory authority proposed that these banks must reimburse the payments over 100 pounds ($107.39).
According to the regulator, a million pounds per payment will be the amount for the maximum claim. However, several banks have lower limits. The period for the time limit on the claim would not be less than 13 months.
“Consumers still need to take caution when sending payments, but these proposed measures will have the added protection that most of their larger payments will be automatically protected,” stated the PSR.
As per the view of regulatory authority, the fraudster’s bank and the bank from which the money was sent will split the reimbursement payment. The cost of processing and fees charged to customers must not be more than 35 pounds.
The Payment Systems Regulator told that in 2021, bank customers lost 583 pounds in APP scams. Expectedly in 2023, there’s a plan to introduce a new rule if the parliament expands the regulatory authority’s power.
The new rule will affect several financial institutions, including HSBC, Barclays, Banco Santander, Natwest Group, Lloyds, Banco Santander, and Virgin Money.
The regulatory authority also plans to publish data on the level of fraud and the way the top 25 banks will reimburse affected customers in APP scam.
Footed by the sending bank, approximately 46% of customers will be reimbursed for authorized push payment scam. According to the expectations of PSR, it would rise to over 95% under the new rule.
The PSR wants a thorough follow-up regarding the deployment of the rule. The banks will check the name of the person paid through a money transfer between banks. Many financial institutions have already agreed to do so.