In situations where customers at a business send money to a bank account controlled by fraudsters, Britain’s Payment Systems Regulator (PSR) announced on Wednesday that it has mandated that banks and payment companies refund victims of online bank fraud within five days.
In recent years, an extraordinary influx of fraudulent online bank transactions known as authorized push payment (APP) fraud has devastated thousands of people’s money.
The Faster Payments system, where the great majority of APP fraud has thus far happened, will be subject to the new rules, according to the PSR, with the refund requirements taking effect the following year.
The regulator added that all payment companies would be encouraged to take action by evenly dividing the expenses of repayment between sending and receiving companies.
Pay.UK, a retail payments company, responded to the regulator’s decision by saying, “We are pleased the PSR has said it will now use its powers to compel all banks and building societies which make and receive payments over the UK’s Faster Payment System to reimburse victims of APP scams when the regime goes live in 2024.”
The PSR announced last year that it intended to adopt new regulations to combat APP fraud after the legislature increased the regulator’s authority.
