Bank Transfer Scams: Your APP Fraud Refund Rights
If you were tricked into sending money by UK bank transfer (Faster Payments or CHAPS) on or after 7 October 2024, your payment firm must usually reimburse you, up to £85,000 per claim. The Payment Systems Regulator says you can expect payment within 5 business days of claiming. You should report within 13 months of the payment.
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What counts as APP fraud
Authorised push payment (APP) fraud happens when you are tricked into sending money to a fraudster by bank transfer, for example through impersonation or romance scams. Reimbursement is mandatory for qualifying payments from 7 October 2024.
APP fraud is different from unauthorised fraud (such as someone using your card without permission), which has different protections. It is also different from civil disputes, where you pay a legitimate supplier for goods or services that are not received or are defective and there is no intent to defraud; other laws such as the Consumer Rights Act may apply.
Payments through other payment systems are not covered, for example sending money to your account at a crypto exchange and then paying a fraudster in cryptocurrency.
Who and which payments are covered
The rules cover individuals, microenterprises and charities. They apply to UK bank transfers from one UK account to another over Faster Payments or CHAPS, across banks, building societies, e-money firms and other payment firms. Credit unions, municipal banks and national savings banks are not included.
Card, cash and cheque payments have their own protections, such as Section 75 for some card purchases. International payments, payments for unlawful purposes, payments before 7 October 2024, and civil disputes as described above are outside mandatory APP reimbursement.
How much you can get back
The maximum reimbursement is £85,000 per claim on Faster Payments; the Bank of England set the same £85,000 limit for CHAPS. Individual firms may choose to reimburse more.
Firms may apply an optional excess of up to £100 (or less, or none). The excess cannot apply to vulnerable consumers. There is no minimum claim value. Sending and receiving firms split reimbursement costs 50:50.
How long a refund takes
You can expect to be reimbursed within 5 business days of making your claim. If the firm needs more information—for example to assess vulnerability—it can stop the clock, but it must reach an outcome within 35 business days.
When a claim can be refused
There are two exceptions: you acted fraudulently (including being complicit in the fraud), or you acted with gross negligence under the consumer standard of caution. Gross negligence is a high bar—a significant degree of carelessness—and the burden of proof is on the payment firm. The gross negligence exception does not apply to vulnerable consumers.
The consumer standard of caution expects you to have regard to specific, directed warnings from your payment firm or a competent national authority; report promptly, and not more than 13 months after the last payment; respond to reasonable information requests; and, when asked, consent to the firm reporting to the police or report it yourself.
How to claim
Contact your payment firm immediately if you think you have been scammed. It will explain the claim process. Report as soon as possible and within 13 months, respond promptly to requests after checking they are genuine, and report to the police or consent to your firm doing so. Victim Support can offer additional support. The PSR cannot investigate individual cases.
If you are unhappy with the decision
If you lose more than £85,000 and it is not fully reimbursed, you can take your case to the Financial Ombudsman Service, which reviews each case on its merits and is free to use.
If you are unhappy with how your firm handled the claim, you can also refer the decision to the Financial Ombudsman Service.
Frequently asked questions
Is there a time limit to report a bank transfer scam?
The consumer standard of caution expects you to report promptly and not more than 13 months after the last payment. A firm can refuse a claim submitted more than 13 months after the final payment.
Can my bank take an excess from the refund?
Firms may apply an optional excess of up to £100, or a lower amount or none. The excess cannot be applied to vulnerable consumers.
Am I covered if I paid by card or sent money abroad?
Mandatory reimbursement covers UK Faster Payments and CHAPS between UK accounts. Card, cash and cheque payments have their own protections. International payments are not covered, and nor are payments through other payment systems, such as paying a fraudster in cryptocurrency from your crypto exchange account.
What does gross negligence mean?
It is a high bar: a significant degree of carelessness, higher than ordinary negligence. The payment firm must prove it, and the exception does not apply to vulnerable consumers.
What if I lost more than £85,000?
The maximum reimbursement is £85,000 per claim, though a firm may pay more. If you lose more and it is not reimbursed, you can take your case to the Financial Ombudsman Service.
Sources
Disclaimer: This article is general information and not personal financial, tax or legal advice. Check your own situation with HMRC, GOV.UK or a regulated adviser.