Updates to CRM Code made by the LSB

London, 8 February 2023: The Lending Standards Board (LSB) has made further updates to the Contingent Reimbursement Model Code (CRM Code) in bid to stamp out Authorised Push Payment (APP) scams before any money changes hands.

The LSB has today published updates to the Code, requiring signatory firms receiving scam payments to play a greater role in protecting the customer, by putting in place measures to stop such transfers.

All signatory firms will also be required to go further in identifying new and existing accounts at higher risk of being used by criminals. By no later than December 2023, firms must be monitoring the payments that they are receiving to help them identify suspicious inbound payments and accounts that might be being used by scammers. This will help firms to stop the onward movement of funds they believe are linked to scams and to recover the money lost by customers who fall victim to these scams.

Emma Lovell, Chief Executive of the LSB, said: “It is essential that firms do all they can to stop criminals from opening bank accounts and using their services to receive scam payments. Strengthening the Code’s provisions means putting in place another tripwire for fraudsters looking to steal people’s savings – not to mention the money needed for essential living costs.”

The CRM Code, launched in 2019, is the only set of protections requiring signatory firms to tackle APP scams by detecting them and putting in place measures to stop them. Where scams slip through the net, the Code also requires those signed up to reimburse customers who lose money through no fault of their own. 

The Payments Systems Regulator (PSR), with which the LSB recently agreed a Memorandum of Understanding reaffirming the co-operation and communication between the two organisations, is currently consulting on a proposal for mandatory reimbursement for victims of scams where more than £100 is stolen.

Ms Lovell comments: “We share the PSR’s drive to ensure more victims are reimbursed where they are not to blame for the success of a scam, but are eager to ensure that fraud detection and prevention continue to be prioritised alongside reimbursement.

“Reimbursement can repair the financial impact on the victim, but it is still very much a lose, lose outcome. Victims lose because they will feel the after-effects and trauma of being scammed even after reimbursement and society loses as organised criminals reap the rewards of theft.

“We strongly believe that firms should continue to sign up and adhere to the CRM Code. Scammers aren’t slowing down, and so we cannot take our eye off the ball. Only by stopping scams can customers truly be protected. Maintaining an industry code focused on preventing and detecting scams ensures firms have the tools to stop more scams and demonstrates their commitment to good customer outcomes and protections.”

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