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Payment firms are urging a reconsideration of UK plans aimed at safeguarding victims of Authorized Push Payment (APP) fraud, asserting that a refund cap of £415,000 could disproportionately impact smaller providers.
APP fraud has emerged as a significant threat in the UK, accounting for losses nearing £500 million last year alone. Amidst mounting pressure from consumer groups and policymakers to address this escalating issue and expedite reimbursements for innocent victims, banks are facing calls for action.
In what the Payment Systems Regulator describes as a transformative measure to enhance fraud protection, a maximum reimbursement level of £415,000 is set to be implemented from October. This move aims to ensure that the majority of funds lost to APP fraud are reimbursed to affected individuals.
However, the Payments Association, representing industry players, has penned a letter to the Economic Secretary to the Treasury, Bim Alami, expressing dissent over the cap. The association contends that the £415,000 limit is “simply not proportionate,” as reported by Bloomberg.
Signed by approximately 30 firms, the letter advocates for a cap of £30,000, aligning with the average loss incurred due to APP fraud. Additionally, it raises concerns regarding the readiness of refund systems by the October deadline.
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