Banks: Authorised Push Payment Fraud

Baroness Bowles of Berkhamsted Excerpts

Thursday 11th June 2020 Lords Chamber

[Baroness Penn]

One of the steps being taken to protect consumers further from the risk of fraud is the introduction of confirmation of payee. That is a new service intended to reduce the number of APP scam attempts succeeding. That was due to be rolled out by the end of March. However, due to Covid, the timeframe was extended to the end of June, with the clear understanding that if any customers had been affected by that delay in rollout—should any fraud have taken place during that time—the banks would compensate them.

[Baroness Bowles of Berkhamsted (LD) [V]]

Articles 4 and 45 of the relevant directive and paragraph 8.298 of the FCA documentation make it clear that it is the payment service provider that will specify the unique identifier to the user in the first instance. Therefore, the point where this is all going wrong is when providers do not specify or check the identifier against the name and address. Is not the confirmation of payee being introduced for just the six largest banks doing only what was intended in the first place, and should it not be rolled out across all payment providers?

[Baroness Penn]

I am sure that once the confirmation-of-payee scheme has been rolled out across the six largest banks, the regulator will look at how that has worked and any further measures that need to be taken. One of the benefits of the code that is in place is that it ensures that, where victims have done everything that should be expected of them, they receive reimbursement and compensation from the bank.