Payment Systems Regulator Announces Measures to Safeguard Consumers from APP Scams

Author DNSPAY Editorial
Payment Systems Regulator Announces Measures to Safeguard Consumers from APP Scams
The Payment Systems Regulator (PSR) has detailed its strategy to enhance transparency and protect consumers from authorised push payment (APP) scams. As part of its new initiative, the PSR will begin publishing data on how effectively banks and building societies are safeguarding their customers from these scams. The PSR has outlined the technical procedures that financial institutions must follow under the new reporting requirements for APP scams. The regulator has also released a consultation document detailing the next steps for implementing these plans. The consultation period will close on 17 January 2023, after which the PSR will review all feedback and publish views on the reporting guidance. Subsequently, a policy statement, direction, and scam data publication template will be issued, along with a timeline for when reporting will commence. In the first half of 2022, there were over 95,000 incidents of APP scams, resulting in nearly £250 million in losses. These scams have caused significant financial harm to many individuals. In response, the PSR is introducing a series of measures to ensure that banks and building societies better protect their customers. The PSR has provided detailed instructions on how to collect and report scam data. For the first time, financial institutions will be required to disclose the proportion of customers affected by APP scams and the rates at which these scams occur at both sending and receiving institutions. Promoting Transparency for a Fairer Financial System The publication of this data will give consumers greater insight into how well financial institutions are combating scams and whether they are reimbursing victims. Kate Fitzgerald, head of policy at the PSR, emphasized the importance of transparency: "Banks and building societies need to be open about the number of their customers who fall victim to APP scams and how they respond to these incidents. "Providing this information will not only help customers make informed choices about which banks or building societies to use but will also incentivize these institutions to improve their fraud prevention measures." The PSR's measures aim to ensure that more victims of APP scams receive reimbursement and to encourage banks and building societies to strengthen their fraud prevention strategies. With the introduction of these regulations, financial institutions are expected to work harder to prevent scams and attract and retain customers through improved performance and transparency.