Question to the HM Treasury:

To ask Her Majesty's Government whether the Financial Conduct Authority has (1) prepared, or (2) submitted to the Treasuy, any reports on (a) the supervision of the implementation of the Contingent Reimbursement Model Code by its signatories to date, and (b) how the Code is operating.

The Government is committed to tackling fraud and ensuring that victims of Authorised Push Payment (APP) scams are protected.

The Government recognises the work industry has undertaken to date, including the introduction of a voluntary reimbursement Code, which has demonstrably had a beneficial impact. However, the Code, whilst improving matters, comes with limitations, including disparity in how different payment service providers are interpreting their obligations under it, as well is its lack of comprehensive cover across providers.

The Government therefore welcomed the publication of the Payment Systems Regulator’s (PSR) call for views on APP scams in February 2021, which set out various potential measures for reducing APP scams and improving customer outcomes. The Government is of the view that the introduction of Faster Payments Service rules setting reimbursement requirements on all scheme participants is the best possible solution to the issue of APP scams; this will ensure the rules underpinning Faster Payments are fit for purpose.

The PSR’s call for views has now closed and the Government is engaging with the PSR on next steps, including considering what further actions may be necessary to make progress on this issue.

The Financial Conduct Authority (FCA) works closely with the Government and PSR through a range of channels to help combat APP scams. In January 2019, the FCA changed its rules to provide victims of alleged APP scams with prompt and fair complaints resolution, and access to dispute resolution through the Financial Ombudsman Service for complaints against payment service providers which receive payments relating to the alleged scam.

In February 2021, the FCA also updated its formal guidance for firms on the fair treatment of vulnerable customers to reinforce the significance of the Code’s provisions on how firms should take into account vulnerability in cases of APP scams.