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On July 12, 2024, the Payment Systems Regulator (PSR) published Policy Statement (PS) 24/3: Faster Payments Scheme (FPS) authorised push payment (APP) scams reimbursement compliance and monitoring. The PS follows the PSR’s April 2024 consultation for all payment services providers (PSPs) in scope of the reimbursement requirement policy to report data and information to Pay.UK, so as to allow it to effectively monitor and manage compliance with the FPS reimbursement rules.
The bigger picture
In December 2023, the PSR published PS23/4: APP scams reimbursement policy statement and the legal instruments to implement it, which set the final detailed parameters of the reimbursement requirement policy and confirmed the commencement of the policy from October 7, 2024.
On July 12, 2024, the PSR also published amendments to the three legal instruments:
- Specific Direction (SD) 19: Directing Pay.UK to create and propose its plans for an effective compliance monitoring regime for APP scams reimbursement (amended July).
- Specific Direction (SD) 20, (including the Compliance Data Reporting Standard - CDRS): Containing the APP scams reimbursement requirement and directing in-scope PSPs to comply with the reimbursement rules (amended July).
- Specific Requirement (SR) 1: Requiring Pay.UK to create the APP scams reimbursement rules (amended July).
This regulatory influencer focuses on PS24/3 and is part of a series that will follow the development of APP fraud reimbursement, including more details on the changes made to the legal instruments mentioned above.
For an overview of the reimbursement requirements, see the “bigger picture” paragraph of Vixio’s regulatory influencer published in June, “PSR's Letter to FPS Participants Ahead of APP Scams Reimbursement Requirement Entering into Force in the UK”.
Why should you care?
PS24/3 confirms:
- The requirement for directed PSPs to register with Pay.UK by August 20, 2024. Pay.UK has procured a Reimbursement Claim Management System (RCMS), a directory to enable firms to communicate with each other and manage APP scam claims. It will further allow firms to report data to Pay.UK so it can monitor and manage firms’ compliance with its FPS reimbursement rules.
- The data under reporting standard A that sending PSPs in scope of the policy are required to keep and report to Pay.UK monthly in respect of transactions they have sent. The first report must be submitted to Pay.UK on January 6, 2025, and cover the period from October 7 to November 30, 2024.
- The use by Pay.UK of the data it receives must be limited for it to fulfil its functions under SD19.
- The PSR’s approach to requiring PSPs:
- To inform consumers of their rights under the reimbursement requirement, and of upcoming contractual changes by October 7, 2024. The PSR will publish more information to support directed PSPs later in July 2024.
- To amend their contractual terms and conditions if they provide a relevant account to consumers. The amendments must be implemented by April 9, 2025, to include a provision that a PSP would reimburse its consumers under the reimbursement requirement and rules.
In terms of next steps, the requirements mentioned above may require significant changes for PSPs from an operational standpoint. For example, to comply, PSPs will need to adjust their consumer communication strategies, as well as their internal processes, to ensure timely and accurate reporting to Pay.UK.
Additionally, the PSR asks PSPs to continue to engage with the PSR and Pay.UK to ensure the implementation of the rules and deliver good outcomes for consumers.
In Autumn 2024, the PSR intends to consult on proposals to require all PSPs to use a single system for FPS APP scams claim management, communication and data reporting, and a potential shift to reporting standard B. It is, therefore, recommended that PSPs participate in the upcoming consultation process.
