HM Treasury has laid before Parliament draft regulations that will strengthen protections for payment service users where their provider has decided to terminate their account and withdraw the payment service.
Under the PSRs in their current form, the bank or other payment service provider must give at least 2 months notice “if the contract so provides”, but research has shown this is not always long enough to allow the customer to discuss with or complain to the provider or to find an alternative account. Some providers have been including periods of less than 2 months in their contracts, which may because the legislation is confusingly drafted.
The draft amendments now propose:
- that the minimum notice period for a provider-initiated termination of in-scope contracts should be 90 days; and
- to require providers to give customers an explanation that is detailed enough to enable the customer to understand why the contract is being terminated and should include their rights to complain to the provider and any rights they have to complain to the FOS.
The draft legislation also proposes changes to the Payment Account Regulations to make them consistent.
The changes are subject to the affirmative resolution procedures.
Treasury proposes that the requirements take effect for in-scope contracts entered into on or after 28 April 2026.