CHAPS payment systems may be caught by a Reimbursement Policy from as early as October 2024

The Payment Systems Regulator has today announced a consultation, proposing that banks and other payment providers (together PSPs) that participate in the CHAPS payments system reimburse customers who become victims of authorised push payment (APP) scams.  

Crucially, the PSR intends the CHAPS protections to come into force on 7 October 2024 – this is the same date as the Faster Payment System (FPS) reimbursement policy implementation date we discussed in our previous article.

The consultation confirms that the approach for CHAPS will be as similar as possible to the approach with FPS, the policy for which was published in June 2023 and offers some obvious benefits in terms of consistency for victims.

In short, all PSPs operating CHAPS and FPS systems will be subject to consistent minimum standards to reimburse victims of APP fraud. This will provide significantly wider coverage than the current Contingent Reimbursement Model Code. The consultation document contains the draft compliance reporting standards and reimbursement rules with some notable differences to the FSP approach including:

  • Sending and receiving PSP's would need to agree the payment system to be used for sending the reimbursable contribution amount.
  • There are no references to updating a central claim record – the CHAPS reimbursement rules instead refer to the provision of information bilaterally between the sending and receiving PSP.
  • Reporting will be via email to the Bank of England directly.
  • Confidentiality provisions have yet to be added.

In-scope PSPs, who may only have measured their reimbursement exposure according to their in-scope customers using FPS, must now take steps to ensure they are prepared for the introduction of both new regimes by October 2024.