Short Definition:
The Consumer Standard of Caution is the set of behaviours a customer must meet to keep their right to reimbursement after Authorised Push Payment fraud, and failing it through gross negligence lets the bank refuse the claim.
Full Explanation:
Under the mandatory APP fraud reimbursement regime that came into force on 7 October 2024, sending banks must reimburse eligible victims within five business days — but they can decline a claim if the customer, through gross negligence, failed to meet one of four requirements: heeding specific bank or police warnings, reporting the fraud promptly (within 13 months), sharing relevant information, and reporting to the police where asked. Gross negligence is a deliberately high bar, well above ordinary carelessness, and the burden of proving it sits with the bank, not the customer. The exception never applies to customers classed as vulnerable. Oversight of this regime is moving from the Payment Systems Regulator to the FCA as part of the ongoing PSR consolidation, so enforcement detail may shift as that transition completes.
In Practice:
A finance lead who authorises a Faster Payment to a "new supplier" after ignoring a specific, transaction-relevant fraud warning from their bank could find that payment excluded from reimbursement — but a generic pop-up warning shown on every transfer wouldn't be enough to trigger the exception.
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Source Link:
https://www.psr.org.uk/media/as3a0xan/sr1-consumer-standard-of-caution-guidance-dec-2023.pdf
Last Reviewed:
20260725
