The Payment Systems Regulator (PSR) is now consulting with the financial services industry to strengthen protection for everyone using payment systems across two areas.

The first relates to protection against APP scams and the other is consumer protection in interbank (bank-to-bank) payments.

Authorised Push Payment (APP) scams, when someone is tricked into making a payment to a fraudster, have been a significant focus for the PSR.

While the introduction of the Contingent Reimbursement Model (CRM) Code has seen some victims getting their money back, last year the PSR called on industry to deliver better outcomes for victims.

In the first half of 2020, losses due to APP scams totalled £208 million. In the regulator’s proposals there are three measures that could help to stop APP scams from happening and, when they do, protect the people who fall victim.

These measures would apply to payments made through Faster Payments and Bacs Direct Credit:

-Making sure everyone can see how banks and building societies handle APP scams, by requiring them to publish their APP scam data, including reimbursement and repatriation levels

-Making it harder for fraudsters, by requiring banks and building societies to adopt a standardised approach to sharing data which will help identify these scams to stop them from happening in the first place

-Extending customer protection across all banks and building societies at a minimum standard by changing payment system rules

“The PSR considers the three options - applied individually or in combination - could make a significant impact on the prevention of APP scams so people don’t become victims in the first place and, where someone does, that stronger protections are in place to help them,” said the regulator.

As more are transferring money using a smartphone app or online banking to send payments to family and friends or businesses, the regulator is also focusing on these interbank payments.

On this, Chris Hemsley, managing director of the PSR, said: “The UK is a world-leader in payments and the move to digital payments is increasing. As it does, people will be looking for choice - but having choice should also mean having the right levels of protection.

“In this call for views we want to understand what protections our banks and building societies should have in place and how we can support this emerging payment method for everyone’s benefit.”

Industry responses for both areas should be provided to the PSR by 8 April 2021.

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