Compliance Briefing — October 7, 2024
The UK Payment Systems Regulator’s mandatory APP fraud reimbursement regime goes live, requiring PSPs to reimburse most Faster Payments victims within five business days and evidence fraud controls under Specific Direction 1.
Executive briefing: From October 7, 2024, payment service providers (PSPs) participating in the UK Faster Payments System must comply with the Payment Systems Regulator’s (PSR) new authorised push payment (APP) fraud reimbursement requirement. Most consumers and SMEs must be reimbursed within five business days for eligible scams, with costs split 50:50 between sending and receiving PSPs.
Key compliance checkpoints
- Eligibility assessment. PSPs must apply the reimbursement requirement to APP scams unless exclusions such as gross negligence or certain international transfers apply, documenting decisions for PSR review.
- Customer communications. Firms must provide clear scam protection warnings, set out reimbursement outcomes, and support vulnerable customers.
- Claims handling. PSPs need processes to triage claims, gather evidence, and execute reimbursements within five business days via Faster Payments.
Control alignment
- Fraud analytics. Upgrade transaction monitoring, mule account detection, and inbound payment screening to reduce liability exposure.
- Governance. Assign accountable executives and board reporting cadence to oversee reimbursement metrics, dispute volumes, and control improvements.
- Third-party coordination. Align policies with Pay.UK’s reimbursement rules, Confirmation of Payee controls, and shared intelligence frameworks.
Enablement moves
- Train frontline teams on eligibility criteria, vulnerability assessments, and escalation paths.
- Integrate reimbursement workflows into case management systems with MI dashboards for PSR reporting.
- Run retrospective reviews of 2023–2024 scam cases to calibrate control effectiveness and highlight priority mitigations.
Sources
- Payment Systems Regulator: APP fraud reimbursement requirements
- PSR Specific Direction 1 (2023) implementing reimbursement regime
Zeph Tech equips UK PSPs with reimbursement workflows, fraud analytics, and governance dashboards to meet PSR’s five-day repayment standard without eroding customer trust.