Our Litigation expert, Phil Jones, looks at a recent regulatory report – and how it could put victims of APP scams in the firing line. 

Last week, the Payment Systems Regulator (PSR) published a new report looking at who exactly is liable for financial loss in successful Authorised Push Payment (APP) scams. Is it you, as the consumer, the sending Payment Systems Operator (PSO), or the receiving PSO?

There’s been confusion over this in recent years. In one case that Capital worked on, for example, our client had been the victim of an APP scam. Their bank hadn’t made the appropriate security checks, so we sought damages from them. We settled the matter before it went to the Supreme Court, but it wasn’t a clear-cut case of who was responsible for reimbursing for the loss.

The new report was created with the good intention of making this clear.

But, it could make it easier for you to fall victim of APP scams – and harder for you to get your money back if you do.  

The report places equal liability on you, as the consumer, and the PSOs. It states that ‘all parties’ must’ve ‘acted appropriately’ to ‘reasonably prevent’ the fraud taking place.

Beforehand, PSOs were responsible for security checks. Now, if a case like this goes to court, you must’ve also taken steps to make sure that the name of the payee company matches the payee account details.

This is tricky. The premise of fraud is that you’re unaware that the account details have been changed – until the money is gone (in most cases, for good).

In light of this new report, it’s even more important for you to be aware of your legal responsibilities. When using CHAPS fast-track payment, or Cheque Imaging Clearing Systems, you need to make sure you’re taking the correct security precautions. Otherwise, you’re risking falling foul of scammers – with no way to get your money back.

Our team has extensive experience of dealing with claims on behalf of fraud victims. Even in cases where the fraudster is long gone, we’ve still secured compensation. Please get in touch to discuss your case. For the right claim, we can also use Capital Dispute Finance – which pays the costs and keeps you free from further financial risk.