Treasury written question – answered on 9th February 2023.
To ask the Chancellor of the Exchequer, what steps his Department is taking to ensure that (a) financial regulators and (b) the Financial Conduct Authority are equipped to protect people against authorised push payment fraud.
To ask the Chancellor of the Exchequer, what recent discussions his Department has had with the banking sector on authorised push payment scams.
To ask the Chancellor of the Exchequer, what steps the Government is taking to help ensure people who are targeted by authorised push payment fraud are reimbursed in full.
To ask the Chancellor of the Exchequer, what discussions he has had with the Payment Systems Regulator on the powers they require to introduce mandatory protections for victims of authorised push payment scams.
To ask the Chancellor of the Exchequer, how many cases the Financial Ombudsman Service has opened in the last year on authorised push payment fraud.
The Government recognises the growing threat posed to consumers by Authorised Push Payment (APP) fraud, with increasingly sophisticated scams that can be detrimental to people’s lives.
Since 2016, the Payment Systems Regulator (PSR) and the payments industry have worked together to both prevent payments fraud, and to develop better mechanisms for reimbursing victims. This has included the voluntary Contingent Reimbursement Model (CRM) Code, introduced in 2019, under which signatory payment service providers voluntarily reimburse APP victims. The government recognised and welcomed these developments.
However, reimbursement to victims of APP scams remains inconsistent. That is why the Government has introduced legislation as part of the Financial Services & Markets Bill to enable the Payment Systems Regulator to require payment service providers (including banks) to reimburse APP scam victims, and placed a duty on the PSR to act in relation to the Faster Payments system (over which vast majority of APP scams currently occur) within 6 months of the legislation coming into force. Following Royal Assent, the PSR will have the powers to deliver an effective reimbursement requirement, and the Government believes this will ensure more consistent and comprehensive reimbursement for APP scam victims.
In its recent consultation on mandatory APP scam reimbursement, the PSR proposed requiring all banks and other payment service providers sending payments over the Faster Payments system to fully reimburse APP scam victims, with very limited exceptions. The Government looks forward to hearing the outcomes of this consultation, and meanwhile continues to progress the enabling legislation within the Financial Services & Markets Bill.
Nevertheless, the Government is clear that fraud prevention is preferable to cure. The Financial Conduct Authority (FCA) already requires banks to take reasonable care to establish and maintain effective systems and controls for countering the risk that they might be used to further financial crime, and it already has the appropriate powers to monitor and enforce compliance with such regulations. The Government and financial regulators are also engaged on what more can be done to improve APP fraud prevention, including considering what legislative change is necessary to support the payments sector in taking a risk-based approach to payments processing.
Regarding Departmental meetings with the banking sector, I would note that Treasury Ministers and officials have meetings with a wide variety of organisations in the public and private sectors as part of the process of policy development and delivery. Details of ministerial and permanent secretary meetings with external organisations on departmental business are published on a quarterly basis and are available at:
The Government recognises that customers can experience inconsistent outcomes under the existing Authorised Push Payment (APP) scam reimbursement Code, which is adjudicated by the Financial Ombudsman Service (FOS). The FOS publishes annual complaints data and insights on its website, which can be found at the following address:
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