FCA proposes changes to complaint handling for victims of authorised push payment fraud

Authorised push payment fraud is where a fraudster tricks an individual consumer or micro business to instruct their payment services provider, such as their bank, to send money from their account to an account controlled by that fraudster.

UK Finance data shows there were 43,875 cases of APP fraud and total losses of £236m in 2017.

Where their own payment services provider is not at fault, victims of APP fraud cannot at present complain to the payment services provider receiving their payment. The FCA said it is consulting to require firms to handle these complaints in line with complaints handling rules in the FCA Handbook.

The FCA is also proposing to allow eligible complainants to refer these complaints to the Financial Ombudsman Service (FOS) if they are unhappy with the outcome reached by the receiving payments services provider, or if they have not received a response to the complaint at all.

The FCA also plans to consult, later in the year, on requiring payment services providers to report data on the complaints about alleged APP fraud that they receive. This data can be used by the industry as an indicator of progress on APP fraud and to inform FCA supervisory work.

The FCA shares concerns with the Payment Systems Regulator (PSR) and the industry that APP fraud is a growing problem. The FCA and PSR investigated APP fraud and found that payments services providers could do more to identify fraudulent incoming payments and prevent accounts from being compromised by fraudsters.

Christopher Woolard, FCA Executive Director of Strategy and Competition, said: “The FCA takes push payment fraud and the harm it causes to consumers very seriously. Our proposals build on our work in this area, and seek to reduce the harm experienced by victims of push payment fraud where they believe the bank who received the money did not do enough to prevent it.

“We are proposing to require payment service providers to handle complaints about this in line with our complaint handling rules, and to provide the victims with access to the FOS.”