(Reuters) – Banks and payments firms must compensate victims of online banking fraud within five days if business users send money to bank accounts controlled by scammers, Britain’s payments systems regulator (PSR) said on Wednesday. .
The UK has seen an unprecedented wave of fake online banking transactions known as Authorized Push Payments (APP) fraud in recent years, with thousands of people watching their savings wiped out .
PSR said the new rules will be implemented for the Faster Payments system, where the vast majority of APP fraud currently occurs, and that reimbursement requirements will come into effect next year.
The regulator also said it would incentivize all payment companies to take action, with sending and receiving companies sharing reimbursement costs equally.
“We are delighted that the PSR has indicated that it will now use its powers to compel all banks and building societies that make and receive payments through the UK Faster Payments system to Reimbursing victims of APP fraud when 2024 goes live,” Pay.UK, a retail payments company, said in response to the regulator’s decision.
The PSR said last year that it planned to introduce new rules to tackle app fraud once parliament expanded the regulator’s powers.