Fake lenders often ask for an upfront “fee” paid by bank transfer before any loan is released. Where a person is tricked into authorising a payment to a fraudster, the fraud is called authorised push payment (APP) fraud, and since 7 October 2024 UK bank transfers have carried a reimbursement requirement set by the Payment Systems Regulator (PSR). This guide summarises what the PSR’s consumer page and policy statement say. It applies to transfers between UK bank accounts and is general information, not legal advice.
What the protection covers
The PSR says the protections apply to individuals, microenterprises and charities, and to payments made on or after 7 October 2024. They cover UK bank transfers, meaning money moved from one UK bank account to another over Faster Payments or CHAPS. Card, cash and cheque payments have their own protections. The arrangements do not include credit unions, municipal banks and national savings banks.
A payment to a person who pretended to be a lender and never sent a loan may fit the description of APP fraud, but each case is assessed by the firm on its facts. How advance-fee scams typically work is explained in this site’s guide to loan fee fraud.
How APP fraud differs from other disputes
The PSR distinguishes APP fraud from unauthorised fraud, such as a stolen card being used, which has different protections. It also separates APP fraud from civil disputes, where a person pays a legitimate supplier for goods or services that are not received or are defective and there is no intent to defraud. For those, the PSR says other protections are available under the Consumer Rights Act. A dispute with a genuine, authorised lender is therefore a matter for the complaints route, not for a fraud claim.
Reporting the payment and the 13-month deadline
The PSR advises contacting the bank immediately when a scam is suspected. The report should be made as soon as possible and within 13 months of making the fraudulent payment. During the process, the victim should respond promptly to the bank’s requests for information, after checking that the request is genuine, and report the details to the police or consent to the bank reporting on their behalf. The PSR itself cannot investigate individual cases of fraud.
How quickly the money comes back
The PSR page says a claimant can expect reimbursement within five business days of making a claim. Where a firm needs more information, it can “stop the clock”, for example to assess whether the victim was vulnerable to the scam, but it must reach an outcome within 35 business days. Firms on both sides of the payment are brought into the arrangements, including, in the PSR’s words, those on the receiving end that bank the fraudsters.
The excess, the cap and exceptions
Firms may apply an optional excess of up to £100, or a lower amount, or none at all. The excess cannot be applied to vulnerable consumers. The maximum claim is £85,000, which the PSR says covers over 99% of claims. Its October 2024 policy statement confirmed that level for Faster Payments and said the Bank of England, as operator of CHAPS, decided on the same limit. Individual firms may choose to reimburse more.
The PSR says a claimant will not get their money back if found to have been complicit in the fraud or grossly negligent, adding that gross negligence is a high bar and the exception does not apply to vulnerable consumers.
If the bank refuses or the loss is larger
The bank investigates and tells the victim its decision. If the victim is unhappy, the PSR says the matter can be referred to the Financial Ombudsman Service, and where more than £85,000 is lost and not reimbursed, the PSR page says the case can be raised there too. The Financial Ombudsman Service’s own page gives an award limit of £455,000 for complaints referred to it on or after 1 April 2026 about acts or omissions on or after 1 April 2019; the PSR page still cites an older £430,000 figure, so it is worth checking the Ombudsman’s current limit. The process for such complaints is described in the guide to the Financial Ombudsman Service. The PSR also points to Action Fraud, Victim Support and Citizens Advice.
Before paying anyone
The PSR encourages people to pay attention to bank warnings, use the Confirmation of Payee name check, and pause before sending money or personal details. For lenders, the FCA register check in the guide to confirming a lender is authorised is the natural first step.
FAQs
Is there a time limit for reporting a bank transfer scam?
The PSR says to report as soon as possible and within 13 months of making the payment.
How much can be reimbursed?
Up to £85,000 per claim under the PSR requirement, and firms may choose to pay more.
Does the reimbursement rule cover card payments?
No. The PSR says its measures apply to UK bank transfers over Faster Payments or CHAPS, and card payments have their own protections.
Can a bank charge me anything?
The PSR says firms may apply an optional excess of up to £100, which cannot be applied to vulnerable consumers.
The bottom line
If a fake lender obtains an upfront fee by bank transfer, the PSR’s rules for authorised push payment fraud may entitle the victim to reimbursement of up to £85,000, normally within five business days of a claim and at most 35 business days. The claim should be reported to the bank as soon as possible and within 13 months, and unreimbursed disputes can go to the Financial Ombudsman Service. Checking the lender’s authorisation first avoids the problem.