The Payment Systems Regulator (PSR) has ordered the UK’s largest payment service providers (PSPs) to demonstrate how effectively they are handling authorised push payment (APP) scams.
The PSR is directing 14 of the UK’s largest PSPs to collect and provide data on their APP scam performance under ‘a package of financial and reputational incentive measures to tackle APP scams’.
The regulator’s recent drive to mitigate the rising risk of payment-based scams includes the publication of scam data, industry efforts to improve intelligence sharing and greater consumer protections for scam victims.
The 14 PSP groups subject to this direction are AIB, Barclays, HSBC, Lloyds, Metro Bank, Monzo Bank, NatWest Group, Nationwide Building Society, Northern Bank Limited, Santander UK, Starling Bank, the Co-operative Bank, TSB Bank and Virgin Money UK.
Together this group accounts for 95 per cent of the UK’s transaction volume, and the advent of this direction will thus shine a necessary spotlight on the industry’s ability to combat rising levels of APP fraud.
No place to hide
The PSR specifically wants to see figures on the proportion of victims of APP scams who do not get reimbursed, the rates of APP scams happening at sending payment firms and the rates of APP scams happening at receiving payment firms.
The regulator has instructed the group to hand over the complete data by the May 2023 deadline, after preparing to publish the data in October of this year.
In addition, the group will need to renew the data every six months, and the requirements may change over time to reflect new information or data that needs to be provided.
The regulator has confirmed that it will present the published data on a banking group basis, aggregating all information from related businesses and subsidiaries in an approach that offers no place to hide.
Time to walk the walk
This latest announcement by the PSR forms a considerable manoeuvre by the UK regulator to cultivate more transparency around the performance of firms in the fight against fraud and largely to the benefit of the consumers who choose to engage with their services.
The regulator is now holding the entire payment industry accountable for their performance, including banks and e-money institutions. The regulator hopes that this increased level of transparency will inspire everyone to do more to prevent fraud and take care of the victims.
It’s certainly a moment of reckoning for the industry. The publication of this information in October will provide consumers with full access to it, allowing them to make better decisions on which financial institutions to bank with and entrust their faith and hard-earned money to.
