(Reuters) -Britain’s Payment Systems Regulator (PSR) said on Wednesday it has made it mandatory for banks and payment firms to reimburse victims of online bank fraud within five days, in cases where users at a business send money to a bank account controlled by fraudsters.
Thousands of people have seen their savings swept away in recent years by an unprecedented wave of fake online bank transactions hitting Britain, called authorised push payment (APP) fraud.
The PSR said the new rules will be imposed on the Faster Payments system, where the vast majority of APP fraud has occurred so far, with the reimbursement requirements coming into force next year.
The regulator also said that all payment firms will be incentivised to take action, with both sending and receiving firms equally splitting the reimbursement costs.
“We are pleased the PSR has said it will now use its powers to compel all banks and building societies which make and receive payments over the UK’s Faster Payment system to reimburse victims of APP scams when the regime goes live in 2024,” Pay.UK, a retail payments firm, said in response to the regulator’s decision.
The PSR last year said it planned to introduce new rules to tackle APP fraud once the parliament expands the powers of the regulator.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Savio D’Souza and Nivedita Bhattacharjee)
