The Financial Conduct Authority (FCA) is consulting on new measures to help tackle the rise of authorised push payment (APP) fraud.

This is where a fraudster tricks an individual consumer or micro business to instruct their payment services provider (PSP) - such as their bank - to send money from their account to an account controlled by that fraudster.

UK Finance data shows there were 43,875 cases of APP fraud and total losses of £236 million in 2017.
Where their own PSP is not at fault, victims of APP fraud cannot at present complain to the PSP receiving their payment, so the FCA is consulting to require firms to handle these complaints in line with its complaints handling rules.

The regulator is proposing to allow eligible complainants to refer these complaints to the Financial Ombudsman Service if they are unhappy with the outcome reached by the receiving PSP, or if they have not received a response to the complaint at all.

The FCA also plans to consult, later in the year, on requiring PSPs to report data on the complaints about alleged APP fraud that they receive. This data can be used by the industry as an indicator of progress on APP fraud and to inform FCA supervisory work.

The Payment Systems Regulator (PSR) has already reported concerns that APP fraud is a growing problem. This follows a ‘super-complaint’ in September 2016 from consumer association Which? to the PSR and the FCA, setting out concerns about the protection available to victims of APP fraud.

Christopher Woolard, FCA executive director of strategy and competition, said they take push payment fraud and the harm it causes to consumers very seriously.

“Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it,” he added.

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