PSR consultation on Authorised push payment scams: The consumer standard of caution - Which? response

Summary of Which?’s views

• It is crucial that the PSR’s proposals for the consumer standard of caution and the exceptions to reimbursement are fairer and more effective in reimbursing APP scam victims than the current Contingent Reimbursement Model (CRM) Code.
• We have concerns with how the three exceptions to reimbursement under the consumer standard are currently drafted and how they may be interpreted. The new proposals place very high expectations on consumers, yet there is very little mention of what should be required of PSPs to make sure as many of their customers get reimbursed as possible.
• We strongly disagree that a requirement for consumers to have regard to warnings should constitute part of the standard of care. There appears to be no requirement on PSPs to evidence that their warnings are effective for different groups of consumers in different circumstances, and to show that this evidence is relevant to a specific scam case. This appears to be a significant step away from the protections under the CRM Code.
• We also have concerns that the requirement on consumers to ‘promptly’ notify their PSP is too subjective. The requirement should also specify that consumers should report the scam within 13 months of learning they have fallen victim to the scam, not from when the last relevant APP scam payment was executed.
• We agree that consumers should respond to reasonable and proportionate requests for information from their PSP, as long as firms consider the circumstances of the scam and the possible vulnerability of a victim. Firms should be required to communicate in a way that meets their customers’ needs. It is unclear how consumers would be able to argue that an information request from their PSP was not essential to the claim.
• The exceptions to reimbursement should only apply where the PSP has complied with the regulatory and legal obligations required of them, and where the lack of compliance in question by the consumer can be proved to be a significant contributory factor to the occurrence of an APP scam payment.
• The PSR’s policy on the consumer standard of caution and exception should be defined in its general direction on PSPs rather than in a separate policy statement and guidance. The general direction should also specify that the burden of proof should be on the PSP to prove that the consumer acted in a grossly negligent manner.