Fraud refund scheme lifts reimbursement to 88%, but gaps remain

According to Which?, the mandatory reimbursement scheme for bank transfer fraud has sharply increased the share of victims getting their money back. The Payment Systems Regulator introduced the rules on 7 October 2024, requiring payment providers to reimburse victims of authorised push payment fraud up to £85,000 in all but exceptional circumstances.

Before the scheme, outcomes depended heavily on which bank a victim used. Which? reports that reimbursement rates have climbed from 61% in 2024 to 88% in the scheme's first 18 months. That is the headline result of the policy: a rule that removed discretion from individual banks produced a measurable, consistent jump in the money returned to victims.

What the numbers show

Only 2% of claims are rejected on the grounds that the victim failed to meet the required standard of caution, according to the PSR's own figures cited by Which?. That matters because it undercuts the old assumption that most fraud victims are careless. The scheme was built on the idea that liability should sit with providers, not customers, and the low rejection rate on caution grounds suggests that principle is holding in practice.

Losses to this type of fraud are still rising. Which? reports authorised push payment fraud losses reached £576.4m last year, up 19%. So the scheme is not stopping fraud from happening; it is changing what happens to victims afterwards. That distinction matters for anyone assessing whether the policy is working: it is a remedy, not a prevention measure, and it should be judged as one.

Where the protection stops

The reimbursement rule only covers UK bank transfers routed through Faster Payments and Chaps. Victims who pay by card, cryptocurrency, money-transfer apps or international bank transfer are not covered. Which? found that among Which? Connect panel members who believed themselves victims of this kind of fraud, only 31% had paid by bank transfer; 55% used a debit or credit card and 8% used PayPal. That means the majority of people who think they are protected by this scheme are not, because the payment method they used falls outside it.

Jackie Greer, a 65-year-old nurse in Brighton, paid €4,250 for a holiday rental last August after the advert's "owner" moved the conversation to WhatsApp and sent an invoice. The listing turned out to be fraudulent and the marketplace refused to refund her. Because the payment was an international transfer, it sits outside the scope of the UK reimbursement scheme entirely.

For anyone who has sent money after being scammed, whether that money is protected now depends on the payment method used, not just on being a genuine victim. That is what the reimbursement scheme changes, and what it still leaves outside its reach.