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 £455,000) 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.

Plain-English guide to the PSR Mandatory Reimbursement Scheme that came into force on 7 October 2024 — £85,000 cap, gross-negligence test, 5-day response window.

How to use the PSR Mandatory Reimbursement Scheme to get a refund

Report the fraud to your bank

Call the fraud line and say "authorised push payment fraud". The bank has five working days to reimburse you or write with reasons.

Provide a crime reference number

Report to Action Fraud (actionfraud.police.uk) or Police Scotland (101) and give the bank your crime reference number if requested.

Cooperate with the investigation

Provide documents, bank statements, and communications when asked. The burden of proving gross negligence is on the bank, not on you.

Escalate to the Financial Ombudsman if refused

Within six months of the bank's final response letter, take the case to the FOS for free, independent review binding on the bank.

PSR Mandatory Reimbursement

Scam Refund · Law and Rules

The PSR Mandatory Reimbursement Scheme — your rights.

For most of the 2010s, APP fraud victims had no statutory right to a refund. Banks called it an authorised payment and walked away. In 2019 the major retail banks signed the voluntary Contingent Reimbursement Model Code. Refund rates improved — but inconsistently. UK Finance data regularly showed rates below 30% at some banks and above 90% at others for similar cases.

The Payment Systems Regulator decided voluntary self-regulation was not enough. Using powers under section 54 of the Financial Services (Banking Reform) Act 2013, it issued direction SD20, which came into force on 7 October 2024. Reimbursement is now mandatory. The rules are the same across all in-scope firms. And the receiving bank pays half the cost — so both sides of the transaction now have a reason to stop fraud early.

Who the scheme covers

The scheme covers Faster Payments and CHAPS sent by a consumer, a micro-enterprise (turnover under €2 million, fewer than 10 employees) or a registered UK charity, to a UK-domiciled account. International payments are out of scope. Card payments, direct debits, standing orders and cheques are out of scope — they have their own protections under the Payment Services Regulations 2017 or the Consumer Credit Act 1974. Around 1,500 firms must follow these rules.

The cap is £85,000 per claim — mirroring the FSCS deposit-protection limit. If your loss is below that, you get the full amount back (less any excess). If your loss is above it, the bank must still pay up to £85,000 under the scheme. You can pursue the rest through the Financial Ombudsman, whose own award limit is £455,000, or through civil action against the receiving account holder.

The gross negligence test

Gross negligence is the bank’s only defence. The PSR has set the bar high on purpose. Being persuaded by a convincing scam is not gross negligence. Being trusting is not gross negligence. Acting under pressure from someone claiming to be your bank is not gross negligence.

What might cross the line: ignoring a specific Confirmation of Payee warning on screen at the moment of payment; continuing to send money after your bank has told you the recipient is a known fraudster; or giving false information to the bank or Ombudsman. Vulnerable customers cannot be denied a refund on gross-negligence grounds at all. The burden of proof sits with the bank.

Once you report the fraud, your bank has five working days to reimburse you or explain in writing why it will not. If it needs more time — to liaise with the receiving bank or pull Confirmation of Payee logs — it can extend by up to 35 further working days. But it must tell you within those first five days that it is doing so. If the bank drags its feet beyond what is reasonable, interest runs on the unpaid sum at the Bank of England base rate.

What the scheme asks of you

Three things. Report the fraud to the bank within 13 months of the last payment. Cooperate with the investigation and provide documents when asked. Report to Action Fraud or Police Scotland and give the bank your crime reference number if it asks for it. None of these is a blocker on its own. Failing one of them only matters if it actively prejudiced the investigation — and the bank has to prove that.

A refusal under the PSR scheme is a complaint under FCA DISP rules. You are entitled to a final response letter with the bank’s reasoning and your right to escalate. From that date you have six months to take the case to the Financial Ombudsman — free, independent, and binding on the bank if you accept its decision. The Ombudsman can award your principal loss, interest at 8% simple per year from the date of loss, and compensation for distress and inconvenience.

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Not legal advice. This guide is for general information only. For advice specific to your circumstances, consult a regulated legal professional or contact Citizens Advice.