Banks face proposals for mandatory APP fraud reimbursement

Customer reimbursement levels under thebanks’ voluntary code to tackle Authorised Push Payment fraud have so far provenpatchy and disappointing, so the Payment Services Regulator wants to imposestronger measures in the coming months, reports Denis O’Connor.

Denis O’Connoris a fellow of both the Institute of Chartered Accountants inEngland & Wales and the Chartered Institute of Securities and Investment.He was a member of the British Bankers’ Association Money Laundering Committeefrom 2003-10 and a member of the Joint Money Laundering Steering Group’s boardand editorial panel between 2010 and 2016. He has been a frequent speaker atindustry conferences on financial crime issues, both in the United Kingdom andabroad.

If proposals made by the Payment ServicesRegulator (PSR) are confirmed this Summer, banks will be required to compensateall their retail customers who have lost funds due to APP (Authorised PushPayment) fraud. [1] Also, banks will be required to publish statistics aboutthe number and value of customers’ APP fraud claims together with reimbursementdata. Finally, banks will be mandated to share data with each other by adoptinga standardised risk rating template and informing their counterparties of therisk rating of all common transactions.