The UK Financial Ombudsman Service (FOS) reports that its uphold rate for complaints from customers of firms who are signatories to the Contingent Reimbursement Model (CRM) Code is higher than those from non-signatories.
Seemingly this is because FOS holds those firms to higher standards (the standards set out in the CRM Code) than non-signatories:
'Typically those cases that are impacted by the CRM have a higher uphold rate – it was around two thirds in the last financial year. This is because the CRM Code provides additional protection for consumers as banks must reimburse their customers unless there are exceptional circumstances. The Financial Ombudsman Service assesses each case against the standards set out by the CRM code, as one of its relevant considerations.'
The CRM Code is a voluntary code introduced in 2019, under which the 10 Payment Service Provider (PSP) signatories commit to reimburse victims of authorised push payment (APP) fraud where the customer has met the standards expected of them under the Code.
Acknowledging that it does not cover exactly the same period as the FOS data, the recently published UK Finance Annual Fraud Report reported 207,372 APP fraud cases in 2022, an increase of 6% on 2021. FOS seems to be seeing a proportionately higher increase in complaints – it says it received 10,985 APP fraud complaints in 2022/23, representing a 17% increase on 2021/22. It also says that it is now receiving more complaints relating to PSPs which are not signatories to the CRM Code – the lack of Code-like provisions applying presumably leading more victims down the FOS route.
In 2024, the CRM Code will be replaced by a mandatory reimbursement requirement which will apply to over 1500 PSPs. While the guidance on the 'customer standard of caution' under this new regime is yet to be consulted on, it should bring consistency across the market. Having an understanding with FOS as to what that standard requires will obviously be key to delivering good customer outcomes. With this in mind and with an eye to the Consumer Duty, which by its very nature will be a consideration for both firms and FOS, it is interesting that Chief Ombudsman Abbey Thomas has commented: '...we don't expect [the Consumer Duty] to significantly change the way we look at many of our complaints. Ultimately, we don't expect it to have a significant impact on complaint volumes.'
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