A new regulatory rule has just come into place in the UK, requiring your bank to refund you for payments which have resulted in you becoming a victim of an Authorised Push Payment (‘APP’) scam.
These protections will apply to bank-to-bank transfers made in the UK via the FPS (Faster payments system) or CHAP’s on or after 7th October 2024.
APP Scams. What Are They?
An APP scam happens when you willingly, transfer money to a fraudster who deceived you by posing as a genuine person or business. It can be a consequence of different types of fraud, such as investment fraud, romance scam, email compromise, holiday scam, help a friend or family member scam, or someone posing to be from your bank or another trusted organisation.
What is NOT Covered:
- Payments completed before the 7th of October 2024.
- Unauthorised payments – This is where you have not authorised or consented to the payment.
- Commercial /Civil disputes e.g. where you have paid a legitimate supplier for goods, services or digital content but have not received them, or they are in some way defective.
- International Payments – Only GBP UK payments made via Faster Payment (Bill Payment) or CHAPs are covered.
- Clients who have been grossly negligent when making their payments.
Limits and Excess:
- There is no claim minimum, but there is a maximum of £85,000 (currently under consultation).
- Each claim following an investigation and review will be assessed as to whether a £100 excess charge is to be applied.
- For further details on of the relevant timescales and the reimbursement scheme you can refer to www.wearepay.uk
How to ensure you are eligible:
As mentioned, the policy does not cover clients who have been grossly negligent when making a payment. Following these steps will not only help prevent you becoming a victim but will also ensure you are eligible in the event you are defrauded:
- Confirmation of Payee – is a service that validates UK sort code and bank account information of a payee before sending payments. This process reduces the risk of sending payments to the wrong account holder.
- Confirm bank details by phone. If you receive an email or message with bank details always re-confirm the payment details to new recipients or new accounts with a known phone number for that individual or company.
- Always request confirmation of receipt of funds from the recipient. If they have not received funds within the normal timeframes for the relevant payment type, contact your payment provider immediately.
What should I do if I think I have been a victim of an APP Scam?
- Contact your payment provider as soon as possible.
- Help to investigate your claim by providing any information that you have regarding the payment and the suspected scam.
- Either report the scam to the relevant body yourself or allow the payment service provider to do so on your behalf, (in the UK the relevant local bodies are your local Police and Action Fraud).
Regarding International Payments…
Transfers in or out of the UK are not covered so it is even more important to follow the steps above to ensure you do not become a victim. It is worth utilising the services of an independent currency broker as they can help you setup payments and validate bank details. Their services are normally completely free of charge and they will take time to understand your specific requirements and priorities.
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