PSR Consultation on APP Fraud Reimbursement

The key takeaways from the PSRs review include:

• The maximum refund amount to fraud victims have been slashed from £415,000 to £85,000 bringing the cap in line with the Financial Services Compensation Scheme (FSCS) limit;
• The proposed new cap will see over 99% of claims (by volume) covered;
• PSRs reinforced aims to balance strong consumer protections with incentives for firms to strengthen anti-fraud measures, while supporting market competition and innovation.

APP scam losses totalled £340.65m across Faster Payments for 2023. PSR analysis indicates that nearly all high-value scams consist of multiple smaller transactions, making transaction limits less effective in managing exposure.

These measures still guarantee stronger consumer protections against APP scams, while incentivising firms to maximise their efforts in preventing fraud.

Although the PSR's reimbursement cap is set at £85,000, banks remain liable for amounts up to the Financial Ombudsman Service's limit of £415,000 in cases where scam victim complaints are escalated.

🗓️ The consultation closes on 18^th September, after which the PSR will thoroughly review the feedback and finalize its approach by the end of the month.

Plenitude’s Fraud Practice can help you navigate this changing landscape. Prompt action and a strategic plan are key to ensuring your fraud risk management remains resilient, minimizes losses, and costs, and meets regulatory expectations.

✅ Learn more about Plenitude’s Fraud Practice https://www.plenitudeconsulting.com/services/fraud-practice