On 12 July 2024, the PSR published a policy statement: The Faster Payments APP scams reimbursement requirement: compliance and monitoring. This follows the PSR's consultation in April proposing all PSPs in scope of its reimbursement requirement policy to report data and information to Pay.UK, so that it can effectively monitor and manage compliance with the Faster Payment System (FPS) reimbursement rules. This publication confirms the PSR's requirements, which will be delivered through amendments to the previously published PSR FPS APP scams legal instruments Specific Direction 19 and Specific Direction 20 (including the Compliance Data Reporting Standards (CDRS)) and Specific Requirement 1.

Alongside the above, the PSR has also published its finalised guidance for PSPs on publishing APP scams data.

So what?

The start date for the APP scam reimbursement policy is 7 October 2024. The PSR is expecting that PSPs continue the work already underway to prepare and ensure they are ready to implement the requirements.

As the operator of Faster Payments, Pay.UK is responsible for monitoring all directed PSPs’ compliance with the FPS reimbursement rules. Where necessary, and where it has the powers to do so, it will take action to manage compliance. Pay.UK published its compliance monitoring regime in June 2024. To ensure the compliance regime is consistent across all FPS participants the PSR is therefore placing reporting obligations on PSPs.

Specifically under the final policy the PSPs will be required to:

• Register with Pay.UK by 20 August 2024. This is one way that all PSPs (both direct and indirect) will identify themselves as in-scope of the policy to Pay.UK and will help facilitate a shared directory – the FPS Reimbursement Directory. This directory will enable PSPs to find one another’s contact details and communicate in respect of FPS APP scam claims received;
• Collate, retain and provide data to Pay.UK according to specific data reporting standards contained in the CDRS which has been published alongside the policy statement. All sending PSPs in-scope of the policy would need to comply with one of the reporting standards (standard A) from 7 October 2024, under which they will be required to collate and retain a focused set of compliance data and report to Pay.UK on a monthly basis. They must submit the first report to Pay.UK by to 6 January 2025 covering the period 7 October to 30 November 2024. The PSR has provided clarification on the reporting boundary. It has confirmed that claims which are clearly not in scope of the Faster Payments APP scams reimbursement requirement will not fall within the reporting scope, but any claims which are potentially in scope of the Faster Payments APP scams reimbursement requirement which, following assessment, is deemed as not reimbursable, must be included in the sending PSP’s monthly reports to Pay.UK, under reporting standard  A.

It is not clear how this data should be reported but the paper indicates that it is for Pay.UK to set out the method of reporting. Reporting standard A will be superseded by a subsequent and a more comprehensive reporting standard B, but at this stage it is not clear when this will be brought into force.

• Ensure the accuracy and quality of the reported data and safe keeping of the same by storing data on secure systems.
• Provide timely responses to reasonable requests for data and information from Pay.UK, where Pay.UK has reasonable grounds to suspect that an in-scope PSP is not compliant.

Separately this policy also confirms requirements for PSPs to:

• Amend their contractual terms and conditions by 9 April 2025 to include a provision that a PSP would reimburse their consumers in line with the reimbursement rules. This will apply to all directed PSPs capable of being a sending PSP who provide a relevant account to consumers.
• Notify consumers of their rights under the reimbursement requirement, and of upcoming contractual changes by 7 October 2024.

It is needless to say, and concerns have already been raised by stakeholders in their response to the consultation, that a number of these requirements will be costly changes and would place an administrative burden on PSPs as they remain focused on implementation. Firms who are still at the early stages of reviewing these requirements therefore need to consider them closely to assess any administrative, system and resources costs implications arising from for example registering and reporting compliance data to Pay.UK and meeting the record-keeping requirements.

For Terms and Conditions changes, firms will need to start thinking about their timelines now, particularly where a firm has a long lead in period for agreeing updates, operationalising the changes and issuing notices of variation to customers.

The PSR has confirmed that as opposed to its original proposals it is currently not requiring PSPs to comply with Pay.UK's FPS rule to use the reimbursement claim management system (RCMS) to manage claims. For now PSPs will have flexibility to use different methods for communication and managing APP claims that best works for them. For next steps therefore the PSR plans to assess details of the commercials – including the costs and pricing structure for RCMS and accordingly to publish further consultation this autumn on proposals to require all PSPs to use a single system for FPS APP scams claim management, communication and data reporting, i.e. the RCMS, and a potential shift to reporting standard B.