The Financial Conduct Authority (FCA) of the U.K. on Tuesday (June 26) announced it is proposing changes to complaint handling rules to help victims of authorized push payment (APP) fraud.
In a press release, the Financial Conduct Authority said that authorized push payment fraud happens when a consumer or micro-business is tricked into instructing their payment service providers, including banks, to send money to an account of a fraudster.
According to the Financial Conduct Authority, in the U.K., there were 43,875 cases of authorized push payment fraud, amounting to total losses of £236 million in 2017. Victims of the scam can’t present a complaint to payment service providers, making it hard for them to remedy the situation. The FCA wants to require firms to handle the complaints in line with the complaint handling rules laid out in the FCA handbook.
Additionally, the FCA said it is proposing that eligible complaints are allowed to be referred to the Financial Ombudsman Service if they aren’t happy with the outcome by the payment service provider or if they have not received a response to the complaint.
Later in the year, the FCA said it would look at requiring payment service providers to report data on complaints about alleged authorized push payment fraud that they receive. The data can be used by the industry to gauge how much authorized push payment fraud is going on and report it back the FCA.
“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,” said Christopher Woolard, FCA executive director of strategy and competition. “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 Financial Ombudsman Service.”
The FCA said it believes, along with the Payment Systems Regulator and the industry, that APP fraud is an increasing problem.