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On July 18, 2024, the Payment Systems Regulator (PSR) published Consultation Paper (CP) 24/10 concerning draft guidance on supporting the identification of authorised push payment (APP) scams and civil disputes.
The draft guidance aims to support payment services providers (PSPs) in their assessment to establish if an APP scam claim raised by a consumer is not reimbursable under the reimbursement requirement, because it constitutes a private civil dispute. Claims for payments made via Faster Payments and Clearing House Automated Payment System (CHAPS) fall within the scope of the draft.
The bigger picture
In June 2023, the PSR published Policy Statement (PS) 23/3: Fighting authorised push payment fraud: a new reimbursement requirement, which confirmed that claims related to a civil dispute would not be reimbursable under the reimbursement requirement. Consumer rights, when purchasing goods and services, are protected by the law, including through the Consumer Rights Act 2015.
An example of a civil dispute provided by the PSR is “where a customer has paid a legitimate supplier for goods or services but has not received them, they are defective in some way, or the customer is otherwise dissatisfied with the supplier”.
Why should you care?
The PSR set out the following principles that PSPs are expected to use when assessing a claim:
- All PSPs should consider the specificity of each claim and payment.
- All PSPs should consider the circumstances causing the disputed payment(s).
- The sending PSP should consider all available relevant information when assessing a claim and make the best efforts to gather it in a timely manner.
- The receiving PSP(s) should provide accurate and complete information, in the event that such information is requested, or material about the receiving account and the account holder.
The draft guidance provides a non-exhaustive list of factors to consider when trying to determine if a claim relates to a civil dispute or reimbursable APP scam, including:
- The communication and relationship between the consumer and alleged scammer.
- The trading status of the alleged scammer.
- The alleged scammer’s capability to deliver the goods and services related to the claim.
- The extent to which the alleged scammer deceived the consumer as to the purpose of the payment.
- Information held by the receiving PSP(s) about the relevant account(s).
The PSR states that the guidance does not form part of Specific Direction 20 (July 2024) (FPS APP scam reimbursement requirement) or any future specific direction for APP scam payments using CHAPS.
However, it is important that PSPs take this guidance into consideration, as when the PSR are assessing whether a PSP is compliant with Specific Direction 20 or any future direction for CHAPS, the regulator will apply the guidance flexibly and will take into account the extent to which the PSP has considered it.
Next steps
The consultation closes on August 8, 2024, and the PSR aims to publish the final guidance in mid-September. Relevant stakeholders can:
- Request a meeting with the PSR to discuss the guidance further.
- Email their comments to appscams@psr.org.uk.
- Write to the PSR at: APP scams, Payment Systems Regulator, 12 Endeavour Square, London, E20 1JN.
