The Treasury Sub-Committee on Financial Services Regulations will examine new proposals for banks and other payment service providers to be required to reimburse scam victims.
The Payment Systems Regulator (PSR) is currently consulting on mandating payment providers to reimburse victims of authorised push payment fraud. These scams, where someone making a payment is deceived or defrauded into authorising a payment to a criminal, have increased in both value and volume in recent years.
Meeting details
The proposals set a high bar for gross negligence, meaning only consumers who show a significant degree of negligence would be denied reimbursement from their bank or building society.
Last month, the Sub-Committee wrote to the PSR asking how it would prevent banks from delaying payments by routinely alleging that consumers have been grossly negligent. The Sub-Committee also asked whether the Financial Ombudsman Service (FOS) has sufficient resources to adjudicate on these decisions, and whether sanctions would be imposed on firms which routinely incorrectly allege gross negligence.
In response, the PSR outlined that reimbursement will be handled by a separate body, Pay.UK, which will monitor and enforce the scheme.
The Sub-Committee will question the PSR, Pay.UK and the FOS on the proposals. MPs are likely to use the session to explore what will count as ‘gross negligence’, how Pay.UK will implement the scheme, and the impact the proposals will have on reducing fraud.