- Home
- News & insights
- Insights
- UK introduces mandat…
- On this page
15 October 2024
Disputes Quick Read – 10 of 103 Insights
UK introduces mandatory reimbursement rules to combat APP fraud
- Quick read
The UK's new mandatory reimbursement rules (the Reimbursement Rules) came into force on 7 October 2024. They aim to protect victims of authorised push payment fraud (APP Fraud). APP fraud is the most prolific financial scam in the UK and occurs where a fraudster tricks a victim into authorising payments to an account controlled by the fraudster. With £459 million lost in 2023, fraudsters often adopt sophisticated methods which are difficult to detect including using fake websites, intercepting email chains and, more recently, via the use of deepfake technology. The issue impacts both businesses and private individuals.
Whilst there is a pre-existing voluntary code of reimbursement, that has not yielded consistent results, and for a number of years, there has been a debate as to who should bear responsibility for the cost of this type of fraud – should the cost be borne by the victims, the banks (and if so – whose bank – the victim's or the fraudster's), or should there be a centralised compensation fund? The reality has been that in many cases the costs have been borne by the businesses or individuals who have been targeted by the fraud, and in some cases by their banks or payment service providers, but often only after lengthy legal processes.
In response, the Payment Systems Regulator (the PSR) has introduced a series of new, mandatory safeguards for payments made by Faster Payments and CHAPs made within the jurisdiction. The key changes under the Reimbursement Rules include:
- UK in-scope Payment Services Providers (PSPs) will be required to reimburse all eligible customers who fall victim to APP fraud, subject to a consumer standard of caution.
- The sending PSP is responsible for determining whether the customer is entitled to reimbursement, and for payment of the reimbursable amount, but may seek a contribution of 50% from the receiving PSP.
- The reimbursements must be made within five business days, unless the PSP requires further information.
- There will be a maximum mandatory reimbursement amount of £85,000.
- There will be no minimum threshold for claims, but there will be a claim excess of £100 at the discretion of the PSP.
- Vulnerable customers will not be subject to the standard of caution nor the excess.
The maximum mandatory reimbursement threshold was originally proposed as £415,000 in June 2024 but this was reduced following a PSR consultation in September 2024. This change came amid reports of lobbying, with opponents arguing (among other things) that the original amount might actually encourage fraudsters, as they may consider it less likely that steps would be taken to pursue them directly for an amount under the threshold. In its announcement, the PSR stated that the lower limit would cover 99% of claims (as the vast majority of APP frauds relate to values below £85,000) and reduce prudential risks for smaller PSPs. The revised limit also notably aligns with the government-backed Financial Services Compensation Scheme's compensation level for deposits and insurance policies.
The Reimbursement Rules aim to offer stronger protection against APP fraud by ensuring faster and fairer reimbursement processes whilst considering the needs of vulnerable individuals. However, international transactions, those exceeding the cap and/or those made by larger enterprises or organisations with annual income exceeding specified limits would be excluded from these protections.
Victims of APP fraud that fall outside the Reimbursement Rules may instead have recourse under common law. The Quincecare duty established a bank's duty not to execute a payment instruction without checking its validity where it has grounds to believe that instruction is not a valid instruction. This typically arises where an agent is making a payment instruction on behalf of a principal (eg a company director giving an instruction on behalf of the company), but applies to businesses and individuals alike. The Supreme Court in Philipp v Barclays Bank UK plc clarified that this duty does not extend to APP fraud claims where the payment has been authorised by the account holder as that is a valid payment instruction which the bank must execute in accordance with its duty to carry out customer instructions. However, Philipp left open the possibility of PSPs being subject to a "retrieval duty" to take reasonable steps to retrieve misappropriated funds where they have been put on notice of relevant facts.
The High Court recently dismissed an application to summarily dismiss a retrieval duty claim against a PSP in CPP v NatWest and Santander. So, whilst the Reimbursement Rules mark a significant step forward in protecting victims of APP fraud, it is likely that those falling out of scope will continue to focus on steps that can be taken to recover their funds through the courts, and we are likely to continue to see further case law in this area.
In this series
Opening the doors: how the January 2026 pilot will transform access to court documents
21 October 2025
by Multiple authors
Collective actions impacting big tech - Ireland set to test the boundaries in ICCL v Microsoft
11 June 2025
Wirral Council v Indivior plc: Court of Appeal upholds strike out of opt-in representative action securities claim
30 January 2025
What are the litigation trends in 2025?
22 January 2025
by Multiple authors
Changes to the privilege rules between companies and shareholders
6 December 2024
Victory for energy companies/defeat for the environment?
14 November 2024
Failure to prevent fraud offence to come into force in September 2025
14 November 2024
by Emma Allen
Essex Cricket Club charged by Cricket Regulator
30 October 2024
by Multiple authors
UK introduces mandatory reimbursement rules to combat APP fraud
15 October 2024
New SFO Director announces bold plans to tackle fraud
21 March 2024
by Emma Allen, Amy Cheng
First of its kind judicial guidance on the use of AI in the courts
14 December 2023
Witness familiarisation - does it affect the court's assessment of witness credibility?
13 December 2023
CAT to hear the first application for a collective settlement approval order
17 October 2023
Pre-Action Protocols – what is different?
12 September 2023
by Tom Charnley
Failure to prevent fraud – a new offence?
14 August 2023
by Multiple authors
Supreme Court rules that APP fraud victims cannot rely on Quincecare Duty
4 August 2023
by Multiple authors
The Law Commission's Consultation Process on the Arbitration Act 1996 – taking stock
21 July 2023
What does the latest decision of the CAT in the Mastercard/Visa proceedings mean for class actions?
10 July 2023
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
1 June 2023
by Multiple authors
Disputes Quick Read – developments in the fixed costs regime
3 May 2023
by James Bryden
Disputes Quick Read: Service by email – are the rules any clearer?
20 April 2023
by James Bryden
Disputes Quick Read: Breaking the north/south divide?
5 April 2023
by Tom Charnley
Disputes Quick Read - What do practitioners think about making alternative dispute resolution (ADR) compulsory?
8 March 2023
Disputes Quick Read: What are the litigation trends for 2023?
2 March 2023
Disputes Quick Read: further guidance on witness statement preparation rules
14 February 2023
Disputes Quick Read: A cautionary tale – settlement agreement (un)wittingly releases all claims for fraud
13 February 2023
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
8 February 2023
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
19 January 2023
Disputes Quick Read: A new approach to giving evidence? WhatsApp with that?
3 October 2022
Disputes Quick Read: Ethereum Merge - what legal issues arise?
22 September 2022
by Emma Allen
Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
9 August 2022
by Nick Maday
Disputes Quick Read: Disclosure - What information can be redacted?
25 July 2022
Disputes Quick Read: what claims exist when a smart contract is breached?
6 July 2022
by Emma Allen
Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
Welcome news for those pursuing fraud claims in the English Courts
28 July 2022
by Emma Allen
Disputes Quick Read: Defining the duty - the limits of the responsibility assumed by professionals
27 July 2022
by Stuart Broom
Disputes Quick Read: Climate change litigation – successful challenge to government's Net Zero Strategy
29 July 2022
Disputes Quick Read: Judicial Review and Courts Act 2022 – now in force
17 June 2022
Disputes Quick Read: an important reminder of the duty to disclose electronic documents in native format
13 June 2022
Disputes Quick Read: ENRC prevails in claim against former solicitor
26 May 2022
Disputes Quick Read: Climate change litigation update – McGaughey v Universities Superannuation Scheme Limited
31 May 2022
by Multiple authors
Don't lose your keys: Bitcoin developers do not have a duty to assist owners in recovering lost cryptocurrency
4 April 2022
by Emma Allen
Disputes Quick Read: The new witness statement preparation rules – a year on
5 April 2022
Disputes Quick Read: ClientEarth v Shell – climate change litigation shifts focus to UK companies
31 March 2022
by Multiple authors
Disputes Quick Read: High Court rules that failure to provide adequate data security is not a positive act
21 September 2021
Disputes Quick Read: Key changes to the Disclosure Pilot Scheme
13 September 2021
Disputes Quick Read: Judicial Review and Courts Bill – unpacking the UK government's proposed amendments
6 September 2021
Disputes Quick Read: Will litigants be compelled to participate in alternative dispute resolution?
2 August 2021
Disputes Quick Read: Freezing injunctions – maximum custodial sentence imposed for breach
21 July 2021
Disputes Quick Read: The online future of civil justice – the end of the legal profession or the end of legal drudgery?
15 July 2021
by Jess Thomas
Disputes Quick Read: Will the courts change forever post-COVID?
26 May 2021
Disputes Quick Read: One Blackfriars administrators cleared of misfeasance
5 May 2021
Disputes Quick Read: Not your prerogative – the Independent Review of Administrative Law reports its recommendations on judicial review
21 April 2021
Disputes Quick Read: Amendments to the Disclosure Pilot Scheme – a step in the right direction
31 March 2021
Disputes Quick Read: UK Supreme Court rules on the territorial extent of the SFO's powers
26 February 2021
by Tim Strong
Disputes Quick Read: No dropping anchor – parent company liability for environmental claims
24 February 2021
Disputes Quick Read: What lawyers need to know about new witness statement preparation rules
20 January 2021
Disputes Quick Read: Should you still choose the English courts to have jurisdiction in your international contracts after Brexit?
12 January 2021
by Tim Strong
Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)
23 November 2020
Disputes Quick Read: Law on interest applicable to US dollar awards reaffirmed
16 October 2020
Disputes Quick Read: Care required when drafting SPA claim notices
23 September 2020
by Stuart Broom
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
7 October 2020
by Nick Storrs
Disputes Quick Read: COVID-19 and supply chain disruption – key issues
9 April 2020
by Multiple authors
Disputes Quick Read: High Court orders parties to explore options for 5-week remote trial
15 April 2020
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
27 April 2020
Disputes Quick Read: UK's OFSI fines Standard Chartered Bank £20 million for sanctions breaches
21 April 2020
Disputes Quick Read: A different approach to witness evidence
11 March 2020
by James Bryden
Disputes Quick Read: Coronavirus - a growth in virtual courts?
17 March 2020
by Stuart Broom
Disputes quick read: climate change activism by litigation
26 February 2020
Disputes Quick Read: Commercial Court's arbitral power shift
21 February 2020
Disputes Quick Read: Court stays evictions during COVID-19 – is this lawful?
2 June 2020
Disputes Quick Read: Will the civil justice system change forever post COVID-19?
16 June 2020
Disputes Quick Read: Retailers reign supreme in Visa and Mastercard proceedings
9 July 2020
Disputes Quick Read: The contra proferentem rule reconsidered?
21 July 2020
Disputes Quick Read: Scope of duty and the SAAMCo counterfactual following Manchester Building Society
3 December 2021
Disputes Quick Read: Facilitating transactions in cryptoassets - Lord Leggatt and the point of commercial law
24 November 2021
by Stuart Broom
Disputes Quick Read: Privy Council clarifies the law on freezing injunctions in aid of foreign proceedings
8 October 2021
Disputes Quick Read: Climate change litigation – what's the latest?
10 January 2022
Disputes Quick Read: Court decisions on the Disclosure Pilot Scheme – the 2021 roundup
20 January 2022
Disputes Quick Read: Assumption of responsibility - tax schemes and investors
22 March 2022
by Stuart Broom
Disputes Quick Read: Dealing in crypto? Be careful what you call it
7 April 2022
Related Insights
APP fraud: testing the limits of recovery
by multiple authors
Trust broken, profits returned: Supreme Court rejects hypothetical arguments
by Natalia Faekova and Emma Allen