Britain’s payments industry calls for delay and cut in scam compensation rules

BRITAIN’S payments sector on Monday (Jun 10) called on its regulator to roll back and delay by a year tough new compensation rules due to start in October, saying that “significant changes” were needed to avoid damaging competition.

The Payment Systems Regulator (PSR) said in December that banks and other payment firms must reimburse defrauded customers to a maximum of £415,000 (S$714,260) from October.

The PSR said the “step change” is needed to combat authorised push payment fraud, whereby people are tricked into sending money from their account to a fraudster posing as a genuine payee, a scam that totalled £239.3 million in the first half of last year.

The Payments Association, an industry body, said in a briefing paper to PSR interim head David Geale, who on Monday replaced Chris Hemsley, that the new rules should be delayed a year to allow the sector to get ready.

Big tech firms should also help tackle payment fraud, the industry body said, adding there should be a cap of £30,000 on reimbursement, still above the average size of scam affecting businesses and individuals.

“We believe that to mitigate systemic risk and prevent damage to the payments industry from some of the PSR’s current plans, significant changes are needed,” Tony Craddock, director general of The Payments Association, said in a statement.

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Without changes, the new rules would significantly increase burdens on companies to reduce competition, the association said.

The PSR, which had no immediate comment on the industry’s request, has said the cost of reimbursement must be split between the sending and receiving banks. REUTERS