What is the mandatory reimbursement scheme for APP fraud

The Payment Systems Regulator (PSR) is introducing a mandatory reimbursement scheme for victims of authorised push payment (APP) fraud from 7 October 2024.

Pay.UK is working with the PSR and the industry to implement the new requirements for the reimbursement for victims of APP fraud.

The central regulation in this initiative is the Faster Payment System (FPS) APP scam reimbursement requirement, which can be viewed in full on the PSR’s website

The PSR has placed an industry-wide legal requirement, via a direction on in-scope payment service providers  (PSPs), to reimburse victims under certain circumstances (Specific Direction 20/SD20).

If you are not already familiar with the SD20 regulation, you can learn more on the PSR’s website, including understanding how to assess whether you are in scope of the requirement.

As operator of the Faster Payment System (FPS), there is also a specific direction (SD19) on us to include the reimbursement requirements, as set out by the PSR, in the FPS rules (Specific Requirement 1/SR1).

We are further required by the PSR to operate a compliance monitoring regime to:

  • Collect data from in-scope PSPs and monitor the consistent compliance of all in-scope PSPs with the reimbursement rules
  • Act appropriately on breaches of the reimbursement rules by all in-scope PSPs in line with applicable enforcement procedures
  • Report data back to the PSR to allow it, as the public authority, to enforce these requirements on non-complaint in-scope PSPs.

The first step for PSPs in complying with SD20 is to register with Pay.UK to confirm that your organisation is in scope of the SD20 regulation, and to agree to be subject to the compliance monitoring regime.

The PSR has mandated that all in-scope PSPs complete this step by 20 August 2024.

We will email PSPs when the registration opens and.  Please email us if you believe your organisation is in-scope and you have not already received an email from us.

  • Solution: We are building an industry-wide APP fraud claims management solution. Referred to as the Reimbursement Claims Management Solution (RCMS), it will allow in-scope PSPs to communicate with one another and manage APP fraud claims using a single solution
  • Compliance: We will publish the final version of the Compliance Monitoring Process on 7 June following formal review and approval by the PSR
  • Rules: We published the latest iteration of the FPS APP reimbursement rules V 0.91 on 14 March. We will publish the final version on 7 June following formal review and approval by the PSR.

The PSR has requested that all FPS Indirect Access Providers submit information about their sponsored customers so that they can also be informed about this legislation. If you are a sponsor, whether a direct or indirect participant of FPS yourself, then please complete the template on the PSR’s website if you have not already done so.

All PSPs, whether direct or indirect may be considered in-scope for this regulation.

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