Recent regulatory developments focussed on the payments sector. Reports on a BoE update on omnibus accounts for payment systems operators and prefunding accounts, and an LSB blog on APP fraud. See also our Financial institutions general regulatory news of broad relevance in the Related Materials links.
The Bank of England (BoE) has updated its webpage on payment and settlement to add the following new sections to the information provided in relation to accessing and using accounts in the BoE's real-time gross settlement (RTGS) to hold funds and settle payments:
The BoE adds that a payment system operator must be recognised under the Banking Act 2009 to be eligible to hold an omnibus account. Organisations interested in applying for an omnibus account should contact the BoE. Payment system operators that are not recognised should discuss recognition with HM Treasury.
The BoE explains it is not possible to apply directly to it for a prefunding account. Applications must be via Pay.UK, as the operator of Bacs, Faster Payments and the Image Clearing System.
The Lending Standards Board (LSB) has published a blog on the power of prevention in the fight against authorised push payment (APP) fraud. The LSB explains that APP fraud has reached unprecedented levels in the UK as criminal organisations have adapted to, and capitalised on, the impact of COVID-19 over the last year.
Customers of firms signed up to the Contingent Reimbursement Model Code (CRM Code) that have fallen victim to an APP scam (through no fault of their own) should expect to be reimbursed in full and should also receive supportive aftercare to help prevent them falling victim again. However, customers should expect to be protected against APP fraud in the first place. While reimbursement levels are an important metric, the LSB considers that it is critical the industry considers prevention and detection measures as well. It elaborates on these in the blog.