In response to the rising threat of Authorised Push Payment (APP) fraud, Elmore Insurance Brokers and Green Swan Compliance have teamed up to introduce a groundbreaking APP Fraud Reimbursement Insurance product. This initiative is tailored for UK banks, Payment Service Providers (PSPs), E-Money Institutions, and Authorised Payments Institutions.
According to UK Finance, APP fraud losses surged to £459.7 million in 2023, marking a 12% increase in cases. With the Payment Systems Regulator poised to enforce new reimbursement rules in October 2024, financial institutions face significant pressure. The upcoming regulations will mandate that the vast majority of money lost to APP frauds—up to £415,000—be reimbursed to victims within five business days of reporting, unless gross negligence can be proven.
To support financial institutions in mitigating these risks and safeguarding their balance sheets, Elmore and Green Swan have developed a comprehensive insurance product specifically designed for UK entities processing Faster Payments. This insurance aims to shield firms from the financial repercussions of the new reimbursement regulations, which could otherwise be overwhelming, particularly for small to medium-sized institutions.
Leven Li, co-founder of Green Swan, emphasized the necessity of such coverage: “All financial institutions with APP exposure need to consider insurance options to mitigate this new risk. The APP reimbursement regulations carry unintended consequences that pose serious challenges for many firms, especially within the EMI industry and those with agents and distributors.”
The collaboration between Elmore and Green Swan signifies a proactive approach to addressing the escalating issue of APP fraud, providing a crucial safety net for financial institutions navigating the complexities of the new regulatory landscape.
For more details on the new APP Fraud Reimbursement Insurance, visit Elmore Insurance Brokers and Green Swan Compliance.