Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps his Department is taking to protect consumers who have been caused financial hardship by misdirected electronic payments; and what steps his Department are taking to help consumers seek recompense.

The Government is taking action to help people who are tricked into making a payment by a fraudster. The Government is legislating in the Financial Services and Markets Bill to enable the Payment Systems Regulator (PSR) to mandate reimbursement to victims of Authorised Push Payment scams in relation to any payment system within its regulatory perimeter. We are confident that this will result in more consistent and comprehensive reimbursement outcomes, ensuring victims are not left out of pocket through no fault of their own.

In cases where a payment is misdirected due to an error by the payer, the payer’s payment service provider must, by law, make reasonable efforts to recover the funds involved in the erroneous payment. Moreover, the payment service provider of the mistaken payee must co-operate with the payer’s payment service provider in its efforts to recover the funds.

The Government has worked with the PSR to tackle misdirected payments at the source, by supporting the rollout of Confirmation of Payee checks. These confirm whether the name of a payee’s account matches the name and account details provided by a payer. In 2022 the PSR issued a direction which will require the vast majority of firms to rollout Confirmation of Payee, increasing coverage from 92% to 99% of all payments by October 2023.