Interim funding for APP scam victim compensation extended to June 2021

A group of seven signatories to the voluntary Authorised Push Payment (APP) Contingent Reimbursement Code have agreed to extend the interim funding to compensate eligible victims of APP scams.

The extension, agreed until 30 June 2021, is for cases where the customer, and sending and recipient banks, have met the standards expected of them under the Code.

The Code was launched on 28 May 2019, having been jointly developed by the banking industry and consumer groups – setting out increased consumer protection standards to help protect customers from APP scams.

Payment service providers that signed up to the Code committed to protecting their customers with procedures to detect, prevent and respond to APP scams, and to providing a greater level of protection for customers considered to be vulnerable to this type of fraud. Providers also committed to preventing accounts being used to launder the proceeds of APP scams, and to compensating customers if they fall victim to an APP scam – provided they did everything expected of them under the Code.

Since the Code was introduced last year, more than £89.2m has been reimbursed to thousands of customers, and banking body, UK Finance, is calling for further action to be taken with new legislation.

“Fraud is a crime which has a devastating emotional impact on victims and its proceeds fund serious criminal activities which damage our society,” said UK Finance managing director of economic crime, Katy Worobec.

“The industry’s primary focus is therefore on stopping fraud in the first place, supporting the prosecution of criminals responsible and helping customers know steps they can take to stay safe.

“It is right that those who fall victim to these scams through no fault of their own should be compensated. However, over a year since its launch, the voluntary Code is not working as intended, with a lack of consistency in customer outcomes and a lack of clarity for signatories in how they should implement it.

“While a long-term, system-wide solution to tackling this threat is developed, the seven Code signatories that have provided interim funding for compensation since launch have therefore extended this temporary arrangement for a further six months. This will give the government time to introduce new legislation and to engage with regulators on a long-term, sustainable funding model and we will continue to work closely with them to do so.”

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