The PSR is consulting on draft guidance on distinguishing between APP scams and civil disputes, after engagement with industry.
The draft guidance aims to support Payment Service Providers (PSPs) with identifying whether an APP scam claim is reimbursable under the reimbursement requirement, or if it is not eligible because it is a private civil dispute. The document sets out the factors that PSPs should consider when determining if a claim relates solely to a private civil dispute and therefore does not fall within the reimbursement requirement. These factors include:
- relationship between the consumer and alleged scammer – PSPs should assess evidence of communication between consumer and alleged scammer, including considering if there has been a breakdown in relationship and if the consumer knew the person they were dealing with;
- trading status of alleged scammer – considering whether the trading status suggests there has been an impersonation and therefore an intent to deceive or misrepresent. If the FCA register suggests a cloned investment firm has contacted the consumer, this is an indication of a reimbursable APP scam;
- alleged scammer’s capability to deliver the goods or services – PSPs should assess the likelihood of the alleged scammer delivering the goods or services paid for;
- extent to which the alleged scammer deceived the consumer as to the intended purpose of the payment – dishonesty alone is not enough for a payment to be considered an APP scam. There must be evidence that dishonest actions relate to the intended purpose of the payment;
- receiving PSP evidence and evidence from other parties – account opening information, account history/usage, any markers on the account, any previous fraud claims, information gathered from their account holder.
The consultation closes on 8 August 2024.