| Fraud and Scams — Key Facts | |
|---|---|
| PSR mandatory reimbursement | From 7 October 2024 banks must reimburse APP fraud victims up to £85,000 |
| 159 service | Call 159 to reach your bank's fraud team directly if you suspect fraud in progress |
| APP fraud | Authorised Push Payment fraud — you are tricked into sending money yourself |
| Chargeback | Card payments can be disputed via your card issuer (Section 75 for credit cards over £100) |
| Report to | Action Fraud: actionfraud.police.uk | 0300 123 2040 |
Fraud is the UK's most common crime by volume. The Payment Systems Regulator's mandatory reimbursement scheme, which came into force on 7 October 2024, fundamentally changed victims' rights — but the scheme has important limits and exclusions you need to understand before assuming you will be reimbursed.
The PSR Mandatory Reimbursement Scheme
Under the PSR's APP Fraud Reimbursement Scheme (Payment Services Regulations 2017, as amended by the PSR's specific directions), banks and payment service providers participating in Faster Payments must reimburse victims of Authorised Push Payment (APP) fraud up to £85,000 per claim, within 5 business days of the claim being submitted. Both the sending and receiving bank share liability 50:50. (Source: PSR — APP Fraud reimbursement policy statement)
The Six Grounds for Refusing Reimbursement
Banks can refuse to reimburse if they can demonstrate one of the following:
| Ground for refusal | What this means in practice |
|---|---|
| Gross negligence | You ignored specific, clear bank warnings — not just generic fraud alerts |
| Fraud by the claimant | You were complicit in the fraud (money mule scenario) |
| No Faster Payments rail | Transaction was CHAPS, SWIFT international, cash or card — scheme does not apply |
| Claim over £85,000 | Amount above cap is not covered — PSR may revise cap in future |
| Claim outside time limit | Claims must be made within 13 months of the transaction |
| Domestic abuse exclusion | Where the victim was coerced by a partner — special handling rules apply |
| ⚠️ Warning: 'Gross negligence' is a high bar. A bank warning you clicked through is not automatically gross negligence. If refused, escalate to the Financial Ombudsman Service — the FOS has found in victims' favour in many PSR reimbursement disputes. |
Five Most Common Scam Types
1. Authorised Push Payment (APP) Fraud
You are tricked into authorising a bank transfer to a fraudster. Common forms: purchase scams (paying for goods that never arrive), impersonation scams (someone pretending to be your bank, HMRC or the police), investment scams, and romance scams. PSR reimbursement applies to APP fraud via Faster Payments.
2. Investment Fraud
Promises of high guaranteed returns on cryptocurrency, forex, bonds or commodities. Check every investment firm on the FCA register at register.fca.org.uk. The FCA Warning List at fca.org.uk/scamsmart lists known fraudulent firms. 'Clone firms' copy legitimate FCA-authorised firms' details — always check the FCA register directly, not via links in emails.
3. Impersonation Fraud
Caller or email claims to be from your bank, HMRC, the police, DVLA or a utility company. A genuine bank will never ask you to transfer money to a 'safe account'. Hang up and call 159 to reach your bank's genuine fraud team.
4. Courier Fraud
Follows an impersonation call — a 'courier' arrives at your home to collect your bank card or cash. Your bank will never send a courier for your card. Hang up; do not open the door.
5. Romance Fraud
A person you meet online (dating site, social media) builds a relationship over weeks or months, then asks for money. Total UK losses to romance fraud: £92.4 million in 2023. (Source: UK Finance — Annual Fraud Report 2024)
Step-by-Step Recovery Process
Step 1 — Call 159 immediately. The 159 service connects you directly to your bank's fraud team. Available 24/7 from most UK landlines and mobiles. Stopping a payment in progress is the most effective intervention.
Step 2 — Ask your bank to raise a Faster Payments recall. If the money has already left your account, your bank can contact the receiving bank to request a recall. Success depends on whether the fraudster has already moved the money on.
Step 3 — Submit a formal fraud claim under the PSR scheme. Ask your bank for their APP fraud claim form. Provide a full written account of the scam and all evidence (messages, emails, payment details).
Step 4 — Report to Action Fraud. Online at actionfraud.police.uk or by phone 0300 123 2040. You will receive a crime reference number. This is required for any insurance claim and strengthens your PSR claim.
Step 5 — If refused by your bank, escalate to the FOS. The Financial Ombudsman Service handles complaints free of charge. Submit online at financial-ombudsman.org.uk within 6 months of the bank's final response letter.
| Disclaimer: This article is for information only and does not constitute financial, legal or tax advice. Figures are correct at date of publication but may change. Always check primary sources (gov.uk, FCA register) and consult a qualified adviser for guidance tailored to your situation. |
Frequently Asked Questions
Does the PSR scheme cover international transfers?
No. The PSR mandatory reimbursement scheme only covers Faster Payments transactions between UK bank accounts. International transfers (SWIFT/SEPA), CHAPS and card transactions are not covered. For card transactions use chargeback (any card) or Section 75 (credit cards over £100).
What is Section 75?
Under Section 75 of the Consumer Credit Act 1974, your credit card provider is jointly and severally liable with the retailer for purchases between £100 and £30,000. If goods are not delivered or a company goes bust, your credit card provider must refund you. This does not apply to debit cards (use chargeback instead) or to transactions made through a third party payment processor like PayPal.
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