Reducing APP fraud and the resulting consumer harm is a strategic priority for the Payment Systems Regulator (PSR) and new rules will come into force next month.

The PSR is now consulting about reducing the maximum reimbursement level for the Faster Payments authorised push payment (APP) fraud reimbursement requirement, which comes into force on 7 October 2024. The new scheme aims to:

• provide greater protections to consumers using Faster Payments, with the aim of driving increased trust and confidence;
• make sure payment service providers (PSPs) have the right incentives in place to drive 
  fraud out of their systems; and
• support growth and innovation in the UK payments industry through increasing trust 
  and confidence.

The PSR proposes that the initial maximum reimbursement level is set at the Financial Services Compensation Scheme (FSCS) reimbursement limit.  This is currently £85,000 for each Faster Payments APP scam claim. This would be a change from the requirement it set out in its policy statement back in December, when it stated that PSPs should reimburse customers that fall victim to a Faster Payments APP scam up to a claim value of £415,000.

The consultation ends on 18 September - that is, very soon! By the end of September 2024, the PSR says that it will publish a policy statement setting out its approach to the maximum level of reimbursement.

The PSR has also said that if it decides to change the limit for Faster Payments after this consultation, the Bank of England, which operates CHAPS, will change the maximum reimbursement level for CHAPS (currently at £415,000) to align it with the PSR's proposed limit for Faster Payments.