FCA response to Payment Systems Regulator’s paper on authorised push payment scams

In December 2016, the FCA committed to identify if there were any firm-specific or sector-wide issues in the way banks handle authorised push payment scams. The FCA has engaged with a number of banks to understand their policies and procedures for handling push payment scams. In general, the FCA found that the procedures for handling cases of push payment scams are often unclear and not consistently applied, and there are insufficient data to understand the scale of these scams. The nature of push payment scams is that they get around banks’ existing systems and controls to detect fraud, and although banks are working to improve their ability to detect these kind of scams, some banks have made more progress than others.

The FCA is therefore supportive of the industry-led initiatives and welcomes the introduction of UK Finance’s Best Practice Standards.  The FCA sees this as a key initiative in tackling push payment fraud. The FCA will be actively monitoring the adoption, implementation and impact of the Standards. The FCA will be writing to members of UK Finance to ask them: 

• If they have committed to adopt UK Finance’s Standards, how they will incorporate them into their policies, procedures and target operating model.
• Whether the Senior Manager with responsibility for the firm’s financial crime policies and procedures is ensuring that there are adequate measures to address payment services fraud (including push payment fraud).

Notes:

1. The PSR’s paper refers to payment service providers (PSPs) which we have referred to using the shorthand ‘banks’.
2. The Payment Systems Regulator (PSR) paper on Authorised Push Payment Scams[1].
3. Authorised push payment fraud occurs when someone is into tricked into instructing their bank to transfer money to a fraudster.