Moving to mandatory reimbursement for APP fraud

Recently-adopted legislation will lead to onerous requirements for banks to share liability for reimbursing victims of in-scope scams, within certain time and value limits. While some firms already have governance and processes in place, others will find preparation a significant undertaking, write Gary Orritt and Daniel Murphy.

Gary Orritt is a senior associate and Daniel Murphy a legal director at law firm Eversheds Sutherland. Contact them on garyorritt@eversheds-sutherland.com and danielmurphy@eversheds-sutherland.com.

The Financial Services and Markets Act 2023 (FSMA 2023) received Royal Assent on 29 June 2023. Section 72 of FSMA 2023 requires the Payment Systems Regulator (PSR) to introduce measures to provide for Mandatory Reimbursement of APP fraud victims in "qualifying cases". Mandatory Reimbursement is currently expected to be implemented by October 2024. The PSR proposed pushing this date back from April 2024 in its latest consultation, published in September 2023.