#ReadyForPSR 

As the UK gears up for a significant shift in financial regulations, fraud professionals worldwide should pay close attention. On October 7, 2024, the Payment Systems Regulator (PSR) will introduce new rules to enhance consumer protection, particularly against Authorised Push Payment (APP) fraud. These changes will impact financial institutions and payment service providers across the UK, necessitating a reassessment of fraud prevention measures and collaboration strategies. 

What is PSR? 

The Payment Systems Regulator (PSR) is the UK's primary regulatory body overseeing payment systems, ensuring they function efficiently and fairly. Its goal is to promote competition, innovation, and protection for users across the payments industry. One of PSR’s key roles is to introduce frameworks that protect consumers from scams and fraudulent activities, especially APP (Authorised Push Payment) fraud. 

APP fraud (scams, or social engineering) occurs when a consumer is tricked into authorising a payment to a fraudster. Traditionally, victims of APP fraud have not always been reimbursed by their payment service providers (PSPs), leaving them financially vulnerable. The new PSR Reimbursement Framework changes that. 

The New Reimbursement Framework 

Starting October 2024, PSPs will be mandated to reimburse victims of APP fraud, ensuring greater accountability and consumer protection. This means that if a customer is tricked into sending money to a fraudster, the PSP must refund the lost amount, thereby reducing the financial impact on victims. 

Key elements of this framework include: 

• Consumer Protection: Mandatory reimbursement for consumers, including individuals, micro-enterprises, and charities, ensuring victims are compensated. 

• Cost Sharing: The financial responsibility for reimbursements will be shared equally between the sending and receiving PSPs. 

• Exceptions: In cases of gross negligence or fraud committed by the consumer, reimbursement will not apply. 

• Cap on Claims: The framework may also include a claim excess (similar to an insurance deductible) and a maximum level of reimbursement. 

Why Should Fraud Fusion Experts Care? 

For fraud fusion professionals, the PSR changes signify much more than compliance. These new regulations represent an evolving landscape where collaboration, technology, and data-driven fraud prevention strategies will play a critical role in safeguarding consumers. 

1. Stronger Emphasis on Fraud Prevention 

With PSPs now responsible for reimbursing victims, there is an increased incentive to strengthen fraud prevention strategies. Anti-fraud teams must refine and implement robust measures to prevent fraud at the earliest stages, leveraging advanced threat intelligence and detection systems. With their comprehensive approach to gathering intelligence across sectors, fraud fusion teams can play a pivotal role in creating these strategies. 

2. Data-Driven Insights and Collaboration 

Fraud fusion centres, which aggregate threat data from various sources, will be more critical than ever in helping PSPs prevent fraudulent activity. By pooling resources and intelligence, fraud fusion teams can better identify patterns, anticipate fraud trends, and stop scams before they occur. In the PSR era, data will be the lifeblood of effective fraud prevention, and fraud fusion teams are at the heart of this data flow.

3. Maintaining Consumer Trust 

One of the primary goals of the PSR framework is to restore consumer confidence in the financial system. Fraud fusion teams will need to work closely with PSPs to ensure compliance with the new rules and implement cutting-edge fraud detection tools. By doing so, they not only protect consumers but also help maintain trust in payment services – a critical factor in today’s competitive financial landscape. 

How ThreatFabric is #ReadyForPSR 

At ThreatFabric, we are #ReadyForPSR. We’ve been working closely with financial institutions to develop innovative solutions that align with the upcoming PSR regulations. Our Device Intelligence and Behavioural Biometrics solutions provide visibility into consumer behavioural anomalies, helping PSPs detect fraud early and prevent APP scams before they cause damage. 

We also believe in the power of collaboration. By working together with fraud fusion teams and industry stakeholders, we are developing compliance-ready tools that empower PSPs to not only meet regulatory requirements but also stay ahead of evolving fraud tactics. 

Should practitioners outside the UK care? 

International banks should pay close attention to the UK’s PSR changes as they may signal a broader trend towards enhanced consumer protection and reimbursement laws globally. In Europe, the upcoming Payment Services Directive 3 (PSD3), expected to be implemented around 2026, aims to combat fraud and improve customer rights.

Meanwhile, Australia is establishing a national anti-scams centre and developing new codes of practice for banks to better protect customers from fraud. In the United States, the peer-to-peer payment system Zelle is under scrutiny by the Senate due to high fraud rates and inadequate reimbursement policies.

These developments indicate a growing global emphasis on consumer protection, suggesting that similar regulations could soon be adopted worldwide.

By staying ahead of these trends, international banks can ensure compliance and maintain consumer trust in an increasingly regulated environment. 

Conclusion: Be #ReadyForPSR 

With the new PSR framework taking effect soon, now is the time for fraud fusion teams to get ahead of the curve. Whether you’re a payment service provider, a financial institution, or an anti-fraud expert, understanding the PSR and its implications will be key to ensuring compliance and protecting consumers. 

Stay #ReadyForPSR and start re-evaluating your fraud prevention strategies today.