The Payment Systems Regulator (PSR) will slash its planned reimbursement amount that victims of fraud can claim, reports suggest.
As it stood, from 7 October banks and payment companies would have to pay up to £415,000 to fraud victims who successfully claimed for a refund.
However, this amount will be lowered to a maximum of £85,000, due to prolonged pressure from fintech firms, according to the Financial Times.
In December 2023, PSR announced the plans to match the upper limit of what the Financial Ombudsman Service (FOS) could offer in redress, which included a claim excess of no more than £100.
The regulator said in August the move would “dramatically increase protection for customers”. It has also been noted the higher rate of reimbursement would incentive banks and other payment firms to prevent APP scams at source “while ensuring victims are protected in a consistent way”.
But, over nine months since the proposals, thanks to reported demands from the former Government and payment firms, the expectation for firms to cover will be £300,000 less than originally intended.
The Payments Association was one dissenting voice, which requested the legislation to be delayed by a year so the industry can have all the correct policies and technology in place to combat scammers.
It even called for the maximum reimbursement for fraud victims in the UK – who lost a total of £1.2bn in 2023 – to go even lower to £30,000.
Meanwhile, the reported climb down customers can claim coincides with the record levels of fraud and scam complaints made to the FOS.
In Q1 2024, over half of the 6,094 fraud and scam complaints were about authorised pushed payments.
‘Outrageous’
Rocio Concha, Which? director of policy and advocacy, said: “It’s outrageous that the payments regulator is set to water down vital scam protections weeks before they were due to take effect and that this move follows months of lobbying from firms that refuse to take fraud seriously.”
Concha added: “Slashing the reimbursement limit risks exposing victims of the highest value scams to devastating financial and emotional harm and also significantly reduces crucial financial incentives for payment firms to put in place effective fraud security measures.
“This makes it more likely that scammers will continue to thrive on some payment platforms.”
YouMoney.com contacted the PSR but they did not comment on the reported changes.
