FCA proposes rules to address APP fraud
The UK’s Financial Conduct Authority (FCA) has proposed new revisions.
In APP fraud, a fraudster tricks a consumer or a micro business to transfer money from their account to an account controlled by that fraudster through payment services providers (PSPs) including banks.
According to UK Finance data, 43,875 cases of APP fraud were reported in 2017 that led to a combined loss of £236m.
As the PSP cannot be blamed in these frauds, the victims cannot complain to their PSPs at this moment. The FCA plans to change the system and enable the firms to manage APP complaints in accordance with the FCA Handbook.
The watchdog also proposed plans to enable the complainants refer their cases to the Financial Ombudsman Service, if they are not satisfied with the decision of the PSP or if the PSP has not responded to their complaints.
In addition, the regulator intends to introduce a new rule later this year, which will require PSPs to provide data on the APP fraud complaints they receive.
FCA executive director of strategy and competition Christopher Woolard said: “The FCA takes push payment fraud and the harm it causes to consumers very seriously. Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it.
“We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the Financial Ombudsman Service.”