PYMNTS Intelligence Alternate Banner June 2024

Reimbursement Backlash Forces Hemsley Out at UK’s Payment Systems Regulator

The managing director of Great Britain’s Payments Systems Regulator (PSR) is reportedly stepping down.

As Bloomberg News noted in a report Saturday (June 1), Chris Hemsley’s departure comes amid rising financial industry anger over new fraud refund regulations.

Hemsley will leave “imminently” following nearly five years running the PSR to become a director for the regulatory advisory firm Fingleton, a spokesperson for the PSR told Bloomberg News, adding that an interim managing director will be announced soon.

The PSR has been dealing with backlash from FinTech firms over new rules — set to go into effect in October — that would require payment providers to refund up to £415,000 ($528,793) to victims of scams.

Executives met last month with Economic Secretary to the Treasury Bim Afolami to express their concerns, arguing that raising the refund limit so high could cause consumers to act more recklessly if their companies would cover their losses.

Afolami himself has indicated he was not a huge fan of the bill.

“I was not in favor of what they did, but I did not have any legal ability to stop it,” he said last month of the PSR. “It was entirely a PSR decision.”

“They agreed that they would review the evidence this year to see whether mine and the industry’s fears had been realized. I do think there are significant problems with this,” he added.

Supporters say the bill is designed to combat a surge in authorized push payment (APP) fraud, which happens when a customer is duped into instructing their bank to move money to another account, in many cases for what they think is a legitimate purpose like paying bills. Instead, that payment is part of a scam, with the person on the other end of the transaction a criminal.

Critics of the new rules include UK Finance, which represents the banking sector and contends that the regulations “may encourage more complicit fraud,” or even lead scammers to pose as victims to recoup even more money.

PYMNTS explored the proposal in March, writing that the policy “put banks and payment firms in a tough spot.”

“The new liability placed on them incentivizes them to take measures to minimize the occurrence of such fraud, and to protect themselves from potential losses, banks might opt to revoke or restrict the option for consumers to make authorized push payments — inconveniencing their customers and restricting their ability to make payments at the same speed as their peers in other countries,” that report said.