The PSR Mandatory Reimbursement Scheme — your rights.

From 7 October 2024, UK banks must refund victims of Authorised Push Payment fraud up to £85,000 per claim, within five working days, unless they can prove you acted with gross negligence. Here is the rulebook in plain English.

When did the PSR Mandatory Reimbursement Scheme start?

The scheme came into force on 7 October 2024. Any APP fraud where the last fraudulent payment was made on or after that date is covered by the new mandatory rules. Older claims still rely on the voluntary Contingent Reimbursement Model (CRM) Code or the bank’s own discretion, with a fall-back to the Financial Ombudsman Service.

Which banks are covered by the scheme?

All Payment Service Providers that offer Faster Payments or CHAPS to consumers, micro-enterprises and charities in the UK. That captures every major retail bank, all the digital challengers (Monzo, Starling, Revolut UK), the building societies, and most credit unions. Around 1,500 firms are in scope. The directing requirement comes from the Payment Systems Regulator under section 54 of the Financial Services (Banking Reform) Act 2013.

How much can I claim?

The cap per claim is £85,000. That mirrors the Financial Services Compensation Scheme deposit limit. If your total loss exceeds £85,000, the bank must reimburse up to the cap and you may be able to pursue the balance through the Financial Ombudsman Service (whose own award limit is £430,000 for complaints referred on or after 1 April 2024) or through civil recovery against the receiving account holder.

What is the £100 excess?

Banks may apply a fixed £100 excess per claim to discourage trivial claims and require some customer responsibility. The excess is waived entirely if you are classed as vulnerable under the FCA’s vulnerable-customer guidance — for example because of age, ill health, recent bereavement, or low financial resilience.

What does "gross negligence" actually mean here?

Gross negligence is a much higher bar than ordinary negligence. The PSR has been explicit that being persuaded by a sophisticated, well-rehearsed scam is not gross negligence. Examples that might cross the line: ignoring a specific, prominent Confirmation of Payee mismatch warning; continuing to send money after the bank has spoken to you and warned you the recipient is part of a known scam; or supplying false information to obtain a refund. The burden of proof is on the bank, not on you.

How quickly does the bank have to respond?

Within five working days of you reporting the fraud, the bank must either reimburse you or set out in writing why it is not going to. The bank can extend the investigation by up to 35 working days if more evidence is needed, but it must tell you within the original five-day window if it is doing so. Interest at the Bank of England base rate runs throughout the delay.

Scam Refund · Law and Rules

The PSR Mandatory Reimbursement Scheme — your rights.

From 7 October 2024, UK banks must refund victims of Authorised Push Payment fraud up to £85,000 per claim, within five working days, unless they can prove you acted with gross negligence. Here is the rulebook in plain English.

A quick history of how we got here

For most of the 2010s, an APP fraud victim in the UK had no statutory right to a refund. Banks treated the payment as authorised and the loss as the customer’s. In May 2019 the major retail banks signed the voluntary Contingent Reimbursement Model (CRM) Code, which set out a framework for refunds and required banks to consider customer vulnerability and bank failings. Refund rates rose — but inconsistently, and with sharp differences between banks. Industry data published by UK Finance regularly showed reimbursement rates ranging from below 30% at some banks to above 90% at others for materially similar cases.

The Payment Systems Regulator concluded that voluntary self-regulation was not delivering. Using powers under section 54 of the Financial Services (Banking Reform) Act 2013, the PSR issued specific direction SD20 (and its accompanying reimbursement requirement) that came into force on 7 October 2024. Reimbursement is now mandatory, the rules are uniform across all in-scope payment firms, and the receiving bank shares the cost 50/50 with the sending bank.

The scheme covers payments made over Faster Payments or CHAPS, sent by a consumer, micro-enterprise (turnover under €2 million and fewer than 10 employees) or registered UK charity, to a UK-domiciled account. International payments are out of scope. Payments by debit or credit card, by direct debit, by standing order or by cheque are out of scope — those have their own protections under the Payment Services Regulations 2017 or the Consumer Credit Act 1974. Roughly 1,500 firms are obliged to follow the rules.

The mandatory reimbursement cap is £85,000 per claim, deliberately mirroring the Financial Services Compensation Scheme deposit-protection limit. If your loss is below the cap, you receive the full amount (less any excess). If your loss is above the cap, the bank must reimburse up to £85,000 under the scheme — but you can still pursue the balance through the Financial Ombudsman Service, which has its own award limit of £430,000 for complaints referred on or after 1 April 2024, or through civil action against the receiving account holder.

The gross-negligence test

The single ground on which a bank can refuse to refund a genuine APP fraud victim is gross negligence on the part of the customer. The PSR has set this bar deliberately high. Gross negligence requires “a significant departure from the level of care that could reasonably be expected of the customer in the circumstances”. Being persuaded by a convincing scam is not gross negligence. Being trusting is not gross negligence. Acting under pressure from someone who claimed to be your bank or the police is not gross negligence.

What might cross the line: ignoring a specific Confirmation of Payee “name does not match” warning shown on screen at the moment of payment; continuing to send money after your bank had spoken to you and identified the payee as part of a known fraud ring; or providing knowingly false information to the bank or the Ombudsman. Crucially, the PSR rules say that customers identified as vulnerable cannot be denied a refund on gross-negligence grounds at all. The full burden of proving gross negligence sits with the bank.

The 5-day response clock

From the moment you report the fraud, your bank has five working days to reimburse you or to write to you setting out why it is not going to. The bank may extend the investigation by up to 35 further working days where it needs more evidence — for example to liaise with the receiving bank or to obtain Confirmation of Payee logs — but it must tell you within the original five-day window if it is doing so. If the bank takes longer than is reasonable to pay out, interest runs on the unpaid sum at the Bank of England base rate.

Customer-standard requirements

The PSR scheme balances the bank’s duty to refund with three modest customer obligations. You must report the fraud to the bank within 13 months of the last fraudulent payment. You must respond promptly and reasonably to the bank’s investigation requests, including providing a chronology and any supporting documents. And you must report the fraud to the police — in practice, to Action Fraud (or Police Scotland) — and supply the crime reference number to the bank if it asks. None of these is onerous, and none is a refund-blocker on its own; failure to comply only matters if it materially prejudices the investigation.

A refusal under the PSR scheme is itself a complaint under the FCA’s DISP rules. You are entitled to a final response letter that sets out the bank’s decision and confirms your right to escalate to the Financial Ombudsman Service. You have six months from the date of that letter to file with the Ombudsman. The Ombudsman is free, applies a “fair and reasonable” test, and is not bound by the bank’s reasoning. Final Ombudsman decisions are binding on the bank if you accept them, and can include the original loss, interest at 8% simple per year from the date of loss, and compensation for distress and inconvenience.

Ready to use these rights?

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