Reimbursement Scheme for APP Scams

The Payment Services Regulator (PSR) is introducing a new reimbursement scheme to address the harms caused to consumers by authorised push payment (APP) scams. The scheme aims to introduce important incentives to prevent fraud, provide a very high degree of consumer protection, particularly for those losing larger sums of money to APP scams, while also ensuring that customers continue to take care when making payments. It is effective from 7 October 2024. The scheme will require us to make changes to your account terms and conditions, and we'll contact you with further details of these changes in the next few months.

APP scams arise where a person manipulates or deceives, by way of fraud or dishonesty, a consumer into transferring funds from their account to an account not controlled by the consumer. They include where a payment is not made to the recipient intended by the consumer, or the payment is for a purpose other than that intended by the consumer. Where the person making the payment is party to any fraud or dishonesty, this is not an APP scam for the purpose of the scheme, and the requirement to reimburse will not apply.

Under the scheme we will reimburse APP scam victims who lose money when sending Faster Payments or CHAPS payments after the scheme comes into effect. The scheme will apply to APP scam payments which are capable of being reimbursed, and where you are the victim of an APP scam you will receive a full refund to your account, subject to the maximum limit of £85,000 per claim. The duty to reimburse will not apply where the consumer standard of caution exception or the time limit on claims applies - see below for further information.

Other exclusions apply to the operation of the scheme. For example: the APP scam payment must be made to an account in the UK that can send or receive payments using the Faster Payments or CHAPS Schemes, and so international payments and scam payments using cheques and cash are therefore excluded. The scheme will only apply to consumers, being individuals, microenterprises and small charities.

Contact us by telephone on +44 20 7224 2277 or by emailing us at info@nbki.com.

Please provide us with details of the date and amount of the APP scam payment(s) and any other information you think might be relevant.

You should expect to receive a reimbursement to your account within five business days of making a claim, unless we "stop the clock" where we have asked for information to help assess the claim and are waiting for a response. The stop-the-clock provisions only apply in limited circumstances, including where we have asked for information to assess the claim, to assess vulnerability and where there may be evidence of a fraudulent claim. In any event we must close the claim before the end of the 35th business day following the reporting of the APP scam claim. We will write to you to let you know the outcome of your claim.

Note that when we contact the receiving bank to trace the payment, we will share relevant information with them, and this will include personal information about you such as your name and account information. 

The reimbursement amount will be the full value of the APP scam claim up to the maximum limit of £85,000 per claim, less any claim excess we may impose (see Excess).

There is an expectation that consumers will exercise a standard of caution when dealing with fraudsters who are attempting to steal funds from their account by persuading them to make a CHAPS or Faster Payment. Where you have acted with a significant degree of carelessness (also known as behaving with 'gross negligence') in making the APP scam payment, then the obligation to reimburse the payment will not apply.

The consideration of gross negligence applies where you fail to meet one of the following standards:

• The requirement to have regard to interventions: you should have regard to specific and direct interventions from your Bank or from a competent national authority, such as the police, that the intended payment is likely to be an APP scam payment. 
• Prompt notification: upon learning or suspecting that you have fallen victim to an APP scam, you should report the matter promptly to your Bank and, in any event, not more than 13 months after the last relevant payment was authorised.
• Responding to requests for information: you should respond to any reasonable and proportionate requests for information we make to help assess a reimbursement claim.
• Police reporting requirement: you should, after making a reimbursement claim, and upon your Bank's request, consent to the Bank reporting to the police on your behalf, or if the Bank requests you should directly report the details of an APP scam to a competent national authority. 

The Bank must consider the reason why you did not meet the relevant requirement when determining gross negligence. Where you are assessed to be a vulnerable consumer, then the Bank cannot rely on this consumer standard of caution exception to deny the reimbursement claim. A vulnerable customer is someone who, due to their personal circumstances, is especially susceptible to harm and the vulnerability has a material impact on their ability to protect themselves from the scam.

You have a period of 13 months after making the APP scam payment, or last payment in a series of APP scam payments, within which to make a claim under the scheme. We are not obliged to reimburse any APP scam claim where this is submitted more than 13 months after that date.

This exception does not apply to vulnerable consumers.

We may apply an excess of up to £100 to a claim under this scheme. However, the claim excess will not apply when the customer is vulnerable, and the vulnerability had a material impact on their ability to protect themselves from the scam. We will assess this on a case-by-case basis.

The maximum level of reimbursement for both Faster Payments and CHAPS payments is likely to be set at £85,000 for each APP scam claim, to match the Financial Services Compensation Scheme (FSCS) reimbursement limit. This is subject to final confirmation by the PSR and the Bank of England following a short consultation. The limit will track any revisions to the FSCS limit, and its effectiveness is to be reviewed after the policy has been in place for 12 months.

If you are unhappy with how we have assessed your APP scam claim under the reimbursement scheme, then you can take your complaint to the Financial Ombudsman Service (FOS). The FOS will consider what is fair and reasonable in circumstances regarding your individual complaint.

Find some useful tips on how to avoid various types of fraud, including APP scams.