The Payment Systems Regulator (PSR) is consulting on a proposal to direct banks and other payment firms participating directly or indirectly in CHAPS (the UK’s high-value payment system) to reimburse their customers who have been victims of authorised push payment (APP) scams. The proposed direction will require payment service providers (PSPs) to comply with the Bank of England’s new CHAPS reimbursement rules (which have also been published in draft for comments directly to the Bank). These APP fraud reimbursement rules and requirements for CHAPS are very similar to the equivalent rules the PSR has previously consulted on for the Faster Payments System (FPS) and will have the same go-live date – 7 October 2024. The aim is to provide a consistent outcome for victims of APP scams across CHAPS and FPS, as well as consistent processes for firms participating in CHAPS and FPS and consistent incentives on PSPs to prevent fraud.
The PSR recognises there may be a cost and administrative burden in bringing in Option 1 by 7 October 2024, so it’s interested in views on what a reasonable timescale for introducing this requirement may be, or whether a phased approach might be more appropriate.
Read on for a more detailed look at the PSR's consultation proposals.
When the PSR published its policy statement PS23/3 ‘Fighting authorised push payment fraud: a new reimbursement requirement’ in June 2023 to increase protections within FPS, the Bank, as the operator of CHAPS, announced its commitment to achieving comparable outcomes of consumer protections for CHAPS.
Some key points from the consultation are as follows:
If you would like to discuss any aspect of the FPS and/or CHAPS reimbursement requirements, please get in touch with one of the people listed above or your usual Hogan Lovells contact.
Authored by Virginia Montgomery and Stephen Timbrell.
APP fraud mandatory reimbursement: UK PSR consults on ‘key’ compliance and monitoring requirements
Are you sure want to delete comment ?
Scan this QR Code to share this content