Deciphering the New Draft De-Banking Rules - The Current Position

Introduction

De-banking can happen for a range of reasons, including customers falling outside of a payment service provider’s financial, legal, regulatory or reputational risk appetite.

However, the UK government has been unequivocal in its view that customers should not see a payment service terminated on grounds relating to their lawful freedom of expression.

Payment Service Providers (‘PSPs’) are also required to adhere to the FCA’s new Consumer Duty rules, which include acting to deliver ‘good outcomes’ for customers.

It is against this backdrop that the current rules on payment service contract termination are being amended.

Those assessing risk and carrying out compliance risk assessments should also be wary of the implications of GDPR, data subject access rights (and potential DSAR and associated disclosures); as well as the associated reputation management, data governance, fraud prevention and cybersecurity risks.

Discretion over use of comms channels as well as AI (transcript recording) and objective process remains key (as well as the risk of deepfakes and solely automated processing of personal data).

PSPs and those advising them must have a good grasp of the requirements in the draft Payment Services and Payment Accounts (Contract Terminations) (Amendment) Regulations 2024 to ensure compliance with the law, protect consumers, manage operational changes effectively and to manage reputational risk.

This short webinar is suitable for PSPs, compliance staff and lawyers.

What You Will Learn

This short webinar will cover the following:

• The current rules on provider-initiated contract terminations
• High-profile de-banking cases and the reasons for reform
• Privacy considerations around data subject access requests, disclosure, data governance, minimisation and reputation management (as well as fraud prevention)
• Changes brought about by the new termination requirements and relevant exceptions
• Complications in balancing the new termination requirements with existing legal obligations

This webinar was recorded on 15th October 2024

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