UK banks and financial institutions compensated GBP 173 million to victims of authorized push payment (APP) fraud during the first year of the Payment Systems Regulator’s (PSR) mandatory reimbursement scheme.
During the twelve months ending September 2025, lenders settled claims for compensation in 88% of eligible cases, marking a new high. This figure shows an improvement from about two-thirds of reimbursements recorded in 2023 and 2024.
The PSR implemented its APP fraud reimbursement program in October 2024, establishing a claim limit of GBP 85,000 for compensation. The initial cap of GBP 415,000 was reduced following industry objections during the consultation phase.
Quarterly payouts quadruple
The amount distributed under this regime almost doubled from GBP 27.6 million in the final quarter of 2024 to GBP 61.1 million in the third quarter of 2025. About 188,000 claims out of a total of 269,000 reported during the year were deemed eligible for reimbursement under the regime, down from the previous period.
PSR officials stated that no significant increase in claim volumes was observed over the year. The decrease in eligible claims is attributed to better overall fraud prevention measures and increased proactive efforts by the industry to prevent fraudulent transactions before they happen.
Approximately 60 banks and payment firms operate under this PSR regime, with data expected to be published later in 2026 identifying which entities make the highest reimbursement payments. Moreover, banks can reject claims if consumers have not exercised due caution, though such rejections remain minimal at just 3% as of the third quarter of September 2025. The PSR reported that there is no evidence suggesting a decline in consumer caution, with around 82% of claims being resolved within five business days and nearly all cases closed within weeks.
Call for reassessment of liability framework
The PSR continues to face pressure to review the industry’s liability structure for APP fraud. Several financial institutions argue that while they have invested heavily in preventing such fraud, banks should not bear the full cost since it is a problem shared among multiple sectors.
Some UK banks are advocating for tech firms, telecommunications providers, and social media platforms to be included within the reimbursement framework as well, asserting that addressing fraud requires joint effort across industries. Regulators have acknowledged the need for stronger fraud controls from social media companies and telecom firms.
The Financial Conduct Authority (FCA) and PSR are currently examining an external review initiated in October 2025 to determine if changes to the regime are necessary. The outcome of this review is expected by mid-2026.
