PSD2 complaints regulation and requirement came into force on 13 January 2018. It introduced novel and updated requirements for dispute resolutions including vital amendments to timeframes under which complaints associated with payment services should be settled. Moreover, there was further complaint reporting revisions that came into force on 13 July 2018.
Consequently, companies had to consider several paramount alterations like the identification process of PSD2 complaints and similar long term operational factors. For instance, PSD2 complaints now have a notably decreased duration to be responded to by payment service providers. Previously this term was set to up to eight weeks, however, was changed to only fifteen days. The key element is that this requirement applies to all payment service providers including banks, authorised payment and e-money institutions, registered account information services and even small payment and e-money institutions.
Payment service providers invariably had to deal with and identify the complaints accurately, however, with PSD2 regulations it became a crucial part of their business. They had to set up mechanisms to recognise which complaints apply to what part of PSD2 complaints revision - is it Payment Service Directive (PSD) complaint or Earnest Money Deposit (EMD) complaint?
What is a PSD2 complaint?
It is crucial to comprehend the essence of what is a PSD2 complaint to apply the new requirements correctly. PSD2 complaints are related to the conduct of business rules in the Payment Services Regulations 2017 (PSRs). These rules are divided into two main classifications:
- information that a customer must receive before and/or after the fulfilment of a payment transaction. For instance, this information can be related to terms and conditions. To read more about it, open Part 6 of the PSRs;
- the rights and responsibilities that encompass both - the payment provider and the customer making the transaction. For instance, applied charges, rightful consent or liability. To read more about it, open Part 7 of the PSRs.
On the other hand, the EMD complaint is related to the Electronic Money Regulations 2011 (EMRs) which addresses the rights and responsibilities concerning issuance and retrieval of e-money.
The effects of PSD2 complaints
After the PSD2 complaints regulation came to effect, PSD/EMD complaints must be dealt with and responded to in a written manner within 15 business days. However, in case of extraordinary situations, the complaint can be handled in 35 business days, though a customer must be informed of exceptional circumstances and the longer duration of the resolution within 15 working days.
In cases where payment service providers fail to comply with the updated PSD2 complaints regulations or are not in full understanding of what is a PSD2 complaint, a customer can forward their position to the Financial Ombudsman Service. This should be done after the 15 business day limit if a complainant has not received any correspondence from the payment service provider. In cases where a customer has confirmation of an accepted complaint, they can refer to the Financial Ombudsman Service 35 days after the confirmation.
Moreover, payment service providers now are obliged to complete Payment Services Complaint Return (PSCR) on an annual basis.