Exact amount banks must refund scam victims under new rules slashed by over £300,000

The Payment System Regulator (PSR) confirmed contiguous the magnitude banks and gathering societies volition request to screen per assertion if wealth is mislaid to an APP scam

The maximum magnitude overmuch is covered erstwhile losing wealth to a scam has been chopped from £415,000 down to lone £85,000 nether caller scam extortion rules.

The Payment System Regulator (PSR) confirmed contiguous the magnitude banks and gathering societies volition request to screen per assertion if wealth is mislaid to an APP scam. APP scams happen erstwhile idiosyncratic is tricked into sending wealth to a fraudster posing arsenic a genuine payee. This benignant of scam has rapidly go 1 of the astir "significant" types of fraud successful the UK accounting for astir £460million successful losses past twelvemonth according to UK Finance.

Under caller rules coming into spot from October 7, firms volition request to reimburse victims of APP scams for the magnitude mislaid wrong 5 concern days. However, the maximum magnitude has been nether consultation with the archetypal connection being £415,000 per claim. This was successful enactment with however overmuch you tin person from a ailment to the Financial Ombudsman Service.

In a reappraisal of 250,000 high-value scams, the PSR recovered 18 instances of radical being scammed for much than £415,000 successful 2023, and 411 instances of much than £85,000. The economical regulator announced a consultation into the alteration earlier this period which lasted lone a specified 2 weeks.

In a connection released today, the PSR said: "This was a cautiously balanced determination – which provides important extortion to fraud victims and strikes an due equilibrium having respect to the PSR’s innovation and contention objectives and making definite that outgo systems enactment good for everyone."

However, the important simplification successful the magnitude covered for APP scams has sparked choler from user groups. Rocio Concha, manager of argumentation and advocacy astatine Which? says the determination has "shamefully sidelined scam victims". They besides noted that the determination puts much Brits astatine "greater risk" of being targetted by criminals arsenic it "reduces the incentives for banks and payments firms to instrumentality fraud prevention seriously".

They added: "The regulator has shamefully sidelined scam victims, contempt the grounds showing that this determination could person a antagonistic fiscal and intelligence interaction connected them. Instead, it caved into a lobbying run from immoderate firms successful the payments industry, immoderate of which person already been warned by the FCA for their relation successful facilitating fraud.

"People don't autumn unfortunate to scams due to the fact that they're careless, but due to the fact that they're ruthlessly manipulated. As the disastrous consequences of this determination for scam victims go apparent, the regulator indispensable cautiously show its interaction and beryllium acceptable to intervene with amended protections for victims on with stronger fiscal incentives for banks and payments firms to tackle fraud." The PSR is owed to people a last argumentation connection explaining the reasoning down its determination adjacent week.