FCA proposes changes to complaint handling rules to help victims of authorised push payment fraud

29 June 2018

Authorised push payment (APP) fraud is where a fraudster tricks an individual consumer or micro business to instruct their payment services provider (PSP), such as their bank, to send money from their account to an account controlled by that fraudster. UK Finance data show there were 43,875 cases of APP fraud and total losses of £236 million in 2017.

Victims of APP fraud cannot complain

Where their own PSP is not at fault, victims of APP fraud cannot at present complain to the PSP receiving their payment. The FCA is consulting to require firms to handle these complaints in line with complaints handling rules in the FCA Handbook. The FCA is also proposing to allow eligible complainants to refer these complaints to the

Report data on the complaints about alleged APP fraud

Financial Ombudsman Service if they are unhappy with the outcome reached by the receiving PSP, or if they have not received a response to the complaint at all. The FCA also plans to consult, later in the year, on requiring PSPs to report data on the complaints about alleged APP fraud that they receive. This data can be used by the industry as an indicator of progress on APP fraud and to inform FCA supervisory work.

Better protect consumers from APP fraud

The FCA shares concerns with the Payment Systems Regulator (PSR) and the industry that APP fraud is a growing problem.  The consultation published builds on the work of the FCA and PSR to better protect consumers from APP fraud. The FCA and PSR investigated APP fraud and found that PSPs could do more to identify fraudulent incoming payments and prevent accounts from being compromised by fraudsters.

Christopher Woolard, FCA Executive Director of Strategy and Competition, said: “The FCA takes push payment fraud and the harm it causes to consumers very seriously. Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it. We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the Financial Ombudsman Service.”


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