Always up to date information for free
Just sign up to British companies myFT Digest — delivered directly to your inbox.
UK regulators are set to dramatically scale back a new regime that could force banks and payments firms to reimburse fraud victims up to £415,000, after coming under intense pressure from ministers and fintech firms.
The new maximum fraud compensation cap is now expected to be just £85,000, according to people briefed on the plans, amid concerns the higher cap could encourage criminals to exploit the compensation system and potentially drive smaller fintech firms out of business.
Those in the Treasury have called the planned new regime, which comes into effect on 7 October, “a disaster waiting to happen” but consumer advocates insist it will provide “vital protection for victims of fraud”.
Afterward months of controversyThe Payment Systems Regulator, the regulator responsible for overseeing the scheme, was told by people briefed on the plans that it was considering a £85,000 payout limit for fraud victims. Industry bodies such as UK Finance have pushed for a lower limit.
This is a developing story.
