The payments industry in the United Kingdom is reportedly advocating for changes to fraud-reimbursement rules that are set to be enacted Oct. 7.
Despite changes announced by the Payment Systems Regulator (PSR) Wednesday (Sept. 4), the industry is pushing for further amendments to these rules, Bloomberg reported Friday (Sept. 6).
The Payments Association wrote to City Minister Tulip Siddiq on Friday, urging for the maximum reimbursement for victims of authorized push payment (APP) fraud to be reduced to 30,000 British pounds (about $39,000), according to the report. The association said this amount would still cover 95% of fraud cases.
The request came after the PSR announced its plan to lower the cap on reimbursements to 85,000 pounds (about $111,600) from 415,000 pounds (about $545,000), following lobbying from the payments industry and feedback from government officials, the report said. The regulator said the new cap would cover over 99% of claims by volume.
APP fraud involves victims being tricked into sending money to criminals. Last year alone, this type of fraud led to 460 million pounds (about $604 million) in losses, the report said, citing research by trade group UK Finance.
The industry is also calling for Big Tech companies to share the liability of fraud losses, per the report. Many banks argue that more than 60% of reported scams in the U.K. originate from sites like Instagram. They say social media and tech companies should have the same financial incentives to control fraud as traditional financial institutions.
Under current rules, Big Tech firms like Instagram parent Meta Platforms are outside the PSR’s jurisdiction, according to the report.
However, the Labour Party, which recently took over the U.K. government, has plans to include Big Tech in the battle against APP fraud, the report said. In a document seen by Bloomberg News, Labour called for Big Tech companies to tackle fraud and reimburse victims.
The implementation of the new fraud-reimbursement rules has proven challenging for many financial firms, the report said. Less than 500 firms have been onboarded onto the Pay.UK system, which is responsible for setting up the communication infrastructure for reimbursements. This means that approximately two-thirds of payments firms are not yet part of the system. However, the firms that have joined represent 95% of fraud volume.
To gather additional responses from banks and payments firms, the PSR has initiated a two-week consultation that will run until Sept. 18, per the report. The regulator plans to announce its final plan by the end of September.