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ARTICLE · 01 AUGUST 2024

Warning: UK Makes Reimbursing Customers Tricked Into Authorizing Payments Mandatory

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The UK is implementing a new mandatory reimbursement regime for authorized push payment (APP) fraud from 7 October 2024. Payment service providers (PSPs) must reimburse victims of APP fraud within 5 business days, covering payments made through the Faster Payment System. The regime applies to consumers, small businesses, and charities, with a reimbursement cap of £415,000 per incident. However, reimbursement may be denied if the victim was grossly negligent, except for vulnerable individuals. Th

United KingdomTechnology
Kai Zhang
Kai Zhang
Judith E. Rinearson
Judith E. Rinearson

Authorized push payment frauds (APP fraud) happen where one is tricked into sending money to a fraudster posing as a genuine payee. Currently some protection is provided to UK victims via a voluntary industry code. However, this has been considered insufficient. So now a new mandatory reimbursement regime is coming, from 7 October 2024.

Under the new regime, the payment service provider (PSP) of the payer who has fallen victim to an APP fraud (the sending PSP) must reimburse the victim within 5 business days of the victim making a claim. The PSP can "stop the clock" in specified circumstances (e.g. to investigate) but this cannot exceed in total 35 business days from the claim date. The victim must make a claim within 13 months of the payment.

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