I was pleased to see the latest publication from the Payments Systems Regulator providing a more balanced model for compensating those impacted by Authorised Push Payment (APP) Fraud. Going forward, the compensation will, in most situations, be split between the remitting bank (i.e. the payers bank) and the beneficiary bank (i.e. the bank who is hosting the mule account)
The Most situations is an interesting element as there are customers who ignore all of the warnings and still insist on making the payment. Using the analogy of “If it walks like a duck and quacks like a duck then it is most certainly a duck” There are situations where the bank of the payer is providing enough warnings of “this doesn’t look right, are you really sure you want to proceed?” such that is the payer ignores all these warnings then why should the paying bank be responsible?
The only issue I have with the new compensation model is the scope to widen the responsibility umbrella. If a fraud is perpetrated on, say, AirBnB then surely, as the hoster of the scam i.e. AirBnB should be a party to the reimbursement model. We do need legislation to support this element that additional parties to a fraud should be held accountable.