As some of you might be aware, from 7th October 2024, the Payment Systems Regulator (PSR) is bringing in new rules across the industry, to help make sure banks and other payment firms in the UK treat victims of authorised push payment (or APP fraud) consistently. APP fraud happens when fraudsters trick you into sending them money from your bank account.
We’re in the process of letting customers know about these changes through the app, so I wanted to jump on here and give you an update about what we’re doing.
If you bank with Monzo and have an eligible APP fraud claim, the new rules mean:
We’ll reimburse you within 5 business days, or for more complex cases this could take up to 35 business days.
We’ll reimburse you up to a maximum of £85,000.
If we reimburse you, we may not pay the first £100 of your claim. For example, for an eligible claim of £500 you’d get back £400. We’ll decide whether to apply an excess by reviewing your personal circumstances, including whether they affect your ability to protect yourself while making a payment.
The new rules allow banks to apply an excess, and in some circumstances we’ll be doing this to help encourage people to act responsibly and take steps to protect themselves, while mitigating the risk of fraudsters exploiting the rules.
These rules apply if you have a Monzo:
Personal account (including joint accounts)
Business account where the business has annual turnover or balance sheet under €2 Million (approximately £1.7 Million) and fewer than 10 employees
The new rules also apply to charity accounts, which Monzo doesn’t currently offer.
They cover:
Bank transfers you made on or after 7 October 2024
Bank transfers you made with Faster Payments (FPS) or Clearing House Automated Payments (CHAPS) in the UK. This includes transfers between Monzo accounts.
Some things aren’t covered, like:
Card transactions you made online or in person
Payments you made by cash or cheque
Payments you made to international accounts (or wallets), credit unions, municipal banks and national savings banks
Payments you made to an account you control
Claims you’ve misrepresented or falsified
Claims where you’ve been grossly negligent
Fraud you reported more than 13 months after the final payment to the fraudster
Civil disputes, like if you’ve paid someone and aren’t happy with the product or service
Unlawful payments for goods or services, like if the payment was for an illegal item
Transactions you made before 7 October 2024 aren’t covered by the new rules, but you should still report fraud and we’ll investigate and assess whether we’ll reimburse you.
Unauthorised fraud (like when someone steals your card) isn’t covered by the new rules, but there are other regulations that apply. You should still report it and we’ll do everything we can to help get your money back.
You should get this information in the app in the next day or two, let me know if you have any questions.
Hasn’t that always been covered by the Consumer Contracts Regulations (previously known as the Distant Selling Regulations)? Or are those only for business sellers?
Can anyone explain to me why banks have to cover the costs of fraud? It feels really rough on banks that if I do something stupid, they have to pay for it. Nice for me, but I just don’t understand it.
Fair enough, never really put much thought into bank transfers and distance selling but yeah, wouldn’t happen for the Joe Public, it’s civil from then.
But a business has certain rules to oblige so it may apply.
Civil disputes are more about when a customer pays a legitimate supplier for goods or services but they don’t get them, or they get them in a defective way. In these scenarios there’s no intention to defraud by the supplier - We do still review claims for disputes, but this isn’t considered fraud and is managed by a different team at Monzo.
We’d consider all the context around a case when making a decision about applying an excess. But an example could be if you had a mental health condition at the time you made a purchase that might’ve impacted your ability to identify the scam.
I think the excess is a very good thing, aslong as it is applied with common sense. It’s important people don’t get it into their heads that the bank will always save the day - eventually they could end up being so negligent that they don’t get a refund and that attitude would also just lead to more fraud in general
