#20: Consumer Protect & Fraud in Payments

6 Mar

20th March 2025

With:

| Oliver Hanmer (Payment System Regulator)

| Dave McPhee (Pay.UK)

In Session #20, Oliver Hanmer (Payment Systems Regulator - PSR) and Dave McPhee (Pay.UK) join FNA to discuss the UK's high-stakes pivot toward mandatory fraud protection. Following the landmark October 2024 mandate, which requires banks to reimburse victims of APP fraud up to £85,000, the discussion explores the operational and cultural shift now required of financial institutions.

The guests move beyond policy to examine the "Data-Intelligence" loop. With Pay.UK processing over £10 trillion annually, Dave McPhee highlights the value of the Reimbursement Claims Management System (RCMS) as a central hub for identifying cross-bank fraud patterns. They also reveal the results of a groundbreaking AI pilot that achieved a 40% uplift in fraud detection, proving that predictive analytics—rather than just manual friction—is the key to a secure, real-time ecosystem.

Key Discussion Points:

The Reimbursement Mandate: Analyzing the impact of shifting liability to both sending and receiving banks to incentivize systemic vigilance.
Confirmation of Payee (CoP): An update on the expansion of CoP, which now covers 99% of UK Faster Payments, and its role in reducing misdirected payments.
The RCMS Utility: How Pay.UK's single claims management system acts as a national "brain" for collating fraud trends from across the industry.
AI & Predictive Overlays: Insights from the 2023-24 pilot with Featurespace and Visa, exploring how overlay services can analyze money flows in real-time.
The "Customer Standard of Caution": Discussing the delicate balance of regulatory expectations—when should a consumer be held responsible for an "obvious" scam?
Holistic Defense: Why the fight against fraud must extend beyond banks to include social media, telecoms, and online platforms where scams originate.