The UK has been a leader among the countries actively participating on the Financial Action Task Force (FATF) based in Paris to tackle global money laundering and fraud. An important national initiative that has been implemented is called the Consumer Duty whose purpose in the simplest terms is to create good outcomes for consumers in their dealings with financial institutions and their ancillary support system such as payment services.
Working closely and in concert with their Financial Conduct Authority (FCA) is what is called a Payment Systems Regulator (PSR). They made a major announcement this month to help consumers deal with Authorized Push Payments (APP) where fraudsters trick them into sending money to what turns out to be an illegitimate account set up to launder money to proceeds of crime.
The Regulator now makes it mandatory for financial institutions in the UK to reimburse innocent victims of these type of scams up to a certain limit. Many of the leading financial institutions have been voluntarily reimbursing innocent victims of these APP scams since 2019. The UK is strong on measuring outcomes with solid metrics to gauge progress.
Below you will find a link to the announcement from David Geale, the managing director of the Payments Systems Regulator. It is groundbreaking and clearly intent on reducing the number of APP scams.
At the bottom of this page you will find notes which include the PSR’s annual APP fraud performance data. It is as they state “a significant step towards greater transparency”. These notes also explain that the UK has a Financial Ombudsman Service where consumer victims can seek compensation beyond the mandatory reimbursement level.
On a positive note, the UK has reported that most APP scams fall under the current reimbursement level limit. Programs such as Confirmation of Payee are preventing these scams from being successfully carried out by the fraudsters. UK financial institutions are taking responsible steps and actions to follow through on the Consumer Duty’s expected requirements to provide better outcomes for consumers.
