It also announced that once a bank or payment company had refunded a customer, it could claim half back from the financial institution the fraudster used to receive the stolen money.
But consumer champion Which? warned there could be “disastrous consequences” as a result of lowering the cap and called on the regulator to monitor any impact.
When criminals dupe their victims into sending them money by pretending to be a legitimate company, such as their bank or a tradesperson or by selling goods that do not exist, this is known as authorised push payment fraud (APP).
The number of cases of this type of fraud rose by 12% to 232,429 in 2023, with losses totalling £459.7m, according to UK Finance., external
There is currently no requirement for banks to refund victims of APP fraud, but these new rules will change that from next month.
The maximum refund was slashed after objections from the financial industry that it could cause problems for smaller firms.
Out of more than 250,000 cases in 2023, there were 18 instances of people being scammed for more than £415,000, and 411 instances where they lost more than £85,000, the PSR said.
