Consultation on Proposed Amendments to Combat APP Fraud

Why we’re consulting
The Treasury has proposed changes to the Payment Services Regulations (PSRs 2017) allowing Payment Service Providers (PSPs) to delay transactions if there’s a reasonable suspicion of fraud or dishonesty.

This policy seeks to enhance the ability of firms to combat APP fraud while minimizing disruption to legitimate payments.

To support this, we’re proposing updates to our Payment Services and Electronic Money – Our Approach (PDF) (Approach Document) to clarify how PSPs should apply these changes without negatively impacting valid transactions.

We are also consulting on additional updates to the Approach Document, outlining how PSPs should handle suspicious inbound payments while maintaining quick and efficient processing.

Who this applies to

• PSPs
• Trade bodies representing PSPs
• Credit institutions offering payment services
• Payment institutions (PIs)
• Electronic money institutions (EMIs)
• Gibraltar-based PSPs operating in the UK
  Additionally, this consultation may interest consumers, micro-enterprises, charities, retailers, consumer groups, credit unions, and law enforcement agencies.

Next steps
We welcome your feedback on our draft guidance. The consultation is open until 4 October 2024.

You can share your comments via our online form or by emailing gc24-5@fca.org.uk.

Once the consultation period ends, we will revise the guidance based on stakeholder feedback and aim to release the final version of the Approach Document by the end of 2024.

Background
The UK has experienced a significant rise in APP fraud, where victims are tricked into authorizing payments either to fraudulent accounts or for illegitimate goods or services.

Tackling financial crime, including APP fraud and money laundering, remains a key priority in our 2024/25 Business Plan.