A recent case offers hope for victims of APP fraud. Jon Felce & Rosie Wild explain the ruling and its ramifications
- Payment services providers (PSPs) may face liability for failing to take reasonable steps to retrieve or recover monies transferred after an APP fraud.
- The decision is subject to appeal and was made in the context of an interim application, so the existence and scope of any duty will need to be determined at trial.
- In the meantime, PSPs will need to consider what steps they need to take to protect themselves against potential liability.
Banks and other financial institutions can sometimes be slow off the mark in reacting to frauds once they are alerted to potential wrongdoing. This can manifest in a failure, once on notice of the potential fraud, to take sufficient steps to seek to stop sums being dissipated and to recover sums fraudulently misappropriated. Reacting promptly can sometimes mean the difference between locking down and recovering funds, and those funds disappearing into the ether through a web of transactions
