FinTech Magazine March 2025 | Page 89

Head of Fintech Compliance Sumsub

How has the UK ’ s 2024 Mandatory Reimbursement Requirement spurred FIs to shore up security ? Authorised Push Payment ( APP ) fraud , where victims are tricked into transferring money to fraudsters , is now one of the largest types of payment fraud – costing UK consumers £ 341m ( US $ 422m ) in 2023 . As such , it is unsurprising that the PSR has taken action to ensure customers can receive at least partial restitution when it occurs .

While this marks a significant step toward protecting consumers from APP fraud , concerns remain that the reduced compensation cap (£ 85,000 ( US $ 105,00 ) per claim ) may leave some victims vulnerable . Besides , reimbursement will not apply if the PSP determines that the individual was complicit in the fraud or acted with gross negligence . However , the concept of gross negligence is often vague and inconsistently applied , which can lead to disputes and uncertainty for victims seeking compensation .

The key is to stay one step ahead of fraudsters . While this can be challenging – especially since it is often hard to prove “ coercion ” or identify transactions driven by deception – one of the measures which can help to detect such fraud is the adoption of AI-powered transaction monitoring solutions .

However , this alone won ’ t solve the problem . Collaboration between regulators , financial institutions and expert fraud prevention companies is essential to create a more secure financial ecosystem .

Anastasia Sakharova

fintechmagazine . com 89