Scam – New Payments Service Regulation in UK
https://www.reuters.com/world/uk/uks-payments-regulator-lays-down-new-norms-tackle-fraud-2023-06-07/
Britain's Payment Systems Regulator (PSR) said
on Wednesday it has made it mandatory for banks and payment firms to reimburse
victims of online bank fraud within five days, in cases where users at a
business send money to a bank account controlled by fraudsters.
Thousands
of people have seen their savings swept away in recent years by an unprecedented
wave of fake online bank transactions hitting Britain, called authorized push
payment (APP) fraud.
The PSR said the new rules will be imposed on the Faster
Payments system, where the vast majority of APP fraud has occurred so far, with
the reimbursement requirements coming into force next year.
The regulator also said that all payment firms will be
incentivised to take action, with both sending and receiving firms equally
splitting the reimbursement costs.
What does this mean
1. Fraudster Charles opens a Cashapp account in UK.
2. He steals information on Diana’s Barclays bank account and adds this stolen bank to his cashapp account
:max_bytes(150000):strip_icc()/Cash_App_02-5ef2f961a1114dc8b46749f6837dcd85.jpg)
3. Charles now adds Diana's stolen bank on his Cashapp account
4. He then uses Diana's bank to send money
300 pounds via p2p to his friend Camilla.
5. At a later Diana checks her account and sees she has been cheated and
files a compliant with Barcxlays
6. Previously before this regulation went live. Barclays would
open an unauth claim on for 300 pounds with Cashapp. Cashapp would take the
time it needs to investigate and have to pay the 300 pounbds back to Barclay
who would maybe a month to complete the investigation then give it back to
Diana
7. After this regulation goes live
- a. Cashapp and Barclays would need to complete the
investigation within 5 days of Diana filing the complaint
- b. For the 300 pounds that needed to be paid back
to Diana Cashapp would need to pay 150 pounds and Barclay would be responsible
for paying 150 pounds
I love this regulation as it is going to force the whole
ecosystem to build more security. PSR is telling Barclays why did you not
protect Diana’s bank account information from getting stolen , so you bear half
the loss. PSR is telling Cashapp 0- hey why did you not detect Charles as a
fraudster on your platform and why did to allow him to use Diana’s stolen bank
on your platform
Fintechs and Banks gear up, PSR will not allow you to write off Scam Disputes
and not pay the customers. So start gearing
up