Treasury publishes payment contract termination changes

Treasury has published the near final version of the amendments to the PSRs that will require payment services providers to give customers at least 90 days’ notice of termination of framework payment services contracts (instead of the current 2 months), as well as giving a detailed and specific explanation of the reasons for termination. There will be exceptions to this requirement, including if the MLR requirement to cease transactions applies,  or if the PSP reasonably believes that the services is being used or is likely to be used in connection with a serious crime.

Additional new requirements include informing the user of their rights to complain and banning firms from putting clauses in contracts that avoid the new requirements by providing the contract can be discharged by agreement. However, there will be a corporate opt-out, so that any customer who is not a consumer, micro-enterprise or charity may agree that the new requirements will not apply.

Comments on the draft are due by 14 April, and the government wants to lay the final legislation before Parliament in the summer.

Emma Radmore