The MRR 13-Month Rule; Everything You Need To Know

The short version  

If you were scammed into sending money by bank transfer after 7 October 2024, you only have 13 months from your last payment to report it to your bank. If you miss that window, your bank doesn't have to refund you under the Mandatory Reimbursement Rules (MRR).

The Financial Ombudsman Service (FOS) has now made clear it will never step in to overrule that, regardless of how reasonable it was for you to miss the payment. For example, even if you couldn’t have known it was a scam until much later, or even if you physically weren’t able to, FOS will not use its fair and reasonable remit

Victims of investment fraud are hit hardest by this decision. This is a major issue as by losses (£), investment fraud victims take the biggest hit by far. Fake mini bonds, "fixed-term" investments and Ponzi schemes are designed so nothing looks wrong for years. When we looked at 594 investment fraud cases that were fully refunded under the old rules, 66% would have been rejected under the 13-month limit if Mandatory Reimbursement Rules were in place instead. On average, those victims took 26 months to report their cases on average and in almost all of those cases the delay in reporting was completely understandable. 

The Payment Systems Regulator (PSR), which wrote the rules, is due to open a formal consultation on changes to the reimbursement scheme in December 2026. That consultation is the best chance to change the rule, and it’s something that everyone can participate in. This article explains:

• how the 13-month rule works
• what we asked the Ombudsman, and what it told us
• why the Ombudsman says its hands are tied, in its own words
• what we're asking the PSR to change, and how you can add your support

If you have already missed the 13-month reporting limit and you are being denied reimbursement, then this is an important issue for you. 

How the reimbursement rules work

Since 7 October 2024, banks and PSPs must refund most victims of authorised push payment (APP) scams. That's any scam where you were tricked into sending the money yourself. The PSR set the rules, and Pay.UK, which runs the Faster Payments system, put them in place.

Three features matter here:

1. The refund is shared 50/50. Your bank (the "sending bank") refunds you. It can then claim back half from the bank that received the money (the "receiving bank"). The aim is to push both banks to stop scams, not just yours.
2. There's a cap. Refunds under the scheme are capped at £85,000 per claim.
3. There's a 13-month time limit. The rules say banks "are not required to reimburse an FPS APP scam claim reported more than 13 months after the date of the final FPS APP scam payment".

If a bank chooses to refund a claim reported after 13 months, the rules call it a "voluntary reimbursement". A voluntary reimbursement sits outside the scheme altogether and is something banks will rarely do. That means no 50/50 split: the sending bank pays 100% and can't recover a penny from the receiving bank.

As we'll see, that one technical point is the main reason the Ombudsman will strictly apply the 13-month limit.

What we asked the Financial Ombudsman Service (FOS), and what it said

The 13-month limit binds banks. It doesn't bind the FOS, which must decide each complaint on what is "fair and reasonable in all the circumstances". So in January 2026 our solicitors wrote to the FOS on our behalf. We argued that:

• The PSR expected the FOS to be the safety net. When the PSR set the limit, consumer groups such as Age UK and Trading Standards cited the issues it would raise. The PSR replied stating that victims outside of the 13 months reporting period could still go to the FOS, which allows up to six years (or three years from when you became aware). FOS can use their “fair and reasonable” remit to overrule regulation when they think it is suitable to do so, which could create a safety net for victims who were not able to report fraud within 13-months. 
• It's how the Ombudsman treats unauthorised fraud. Refunds for unauthorised payments (for example, a stolen card) have the same 13-month limit, and the PSR chose 13 months to match it. In those cases, FOS has routinely overruled the 13-month limit where a victim had a good reason for reporting late.
• Some victims simply can't report within 13 months. A two-year bond doesn't look like a scam until it fails to pay out after two years. A Ponzi scheme keeps paying "returns" until it collapses.

We asked FOS to apply a similar approach that it adopts in unauthorised fraud cases and apply it to authorised fraud cases. That is, use their powers to overrule the 13-month limitation in situations where it is fair and reasonable to do so, such as when a fraud victim could not have reported their case within 13-months as they were unaware they were the victim of fraud. 

The reply

The Ombudsman's legal team deliberated for nine months, and then replied in September 2026. Our understanding is that they also consulted extensively with the Payment Services Regulator when defining their approach. It said its views were "provisional" and that each case will still be decided on its own facts. But its conclusion was clear:

"we're not currently persuaded that it will be regarded in many cases as fair or reasonable to require PSPs [e.g. banks] to make voluntary reimbursement payments where the application of the 13-month time limit takes the claim outside the MRR."

It went further, and named the exact reasons we thought it would overrule the 13 month reporting limit on:

"we doubt that our ombudsmen will find it sufficient to waive the 13-month limit that a consumer couldn't have discovered the fraud any sooner, that the delay was caused by the customer's vulnerability, or that the limit otherwise has detrimental financial consequences for the complainant."

In plain English: not knowing you'd been scammed, being vulnerable, or losing a life-changing sum are not going to be enough. FOS "will probably regard compliance with the 13-month time limit as a condition which should be upheld and not readily disapplied".

The Financial Ombudsman Service has made it clear that they will strictly apply the 13-month rule. FOS has now also issued final decisions on cases to confirm their approach. 

Why the Ombudsman says its hands are tied

The FOS’s response was detailed, but there are four points of note: 

1. Bank refunds outside of the 13-month limit fall outside the 50/50 split

The rules label any refund after 13 months as "voluntary", so the sending bank would carry 100% of the cost. In FOS’s words:

"It seems to us it would be contradictory for the regulator on the one hand to expect PSPs to be compelled by FOS to make reimbursement payments on out-of-time claims whilst, on the other hand, deeming these to be voluntary payments that fall outside the MRR and ineligible for the 50:50 cost-sharing regime."

Put simply, the Ombudsman doesn't think it can make a refund "compulsory" when the regulator has written it down as "voluntary". And it would leave your bank paying the whole bill while the receiving bank, which let the scammer open and use the account, pays nothing.

2. One decision would become a rule for every bank

Banks must handle complaints in line with how the FOS decides cases. So if FOS started setting the limit aside for, say, long-term investment scams, every bank would have to do the same in its own complaint handling. FOS says that would turn "voluntary" refunds into a regulatory obligation "even without any referral of the reimbursement claim to FOS". It doesn't think the PSR intended that.

3. The time limit is the regulator's call

FOS points out that Parliament gave the PSR, not the FOS, the job of deciding which payments qualify for a refund. The PSR picked 13 months after a full consultation, knowing that "some frauds would not be discovered within the claiming period". One stated aim was to stop banks facing "a build-up of open-ended liabilities".

FOS also notes the PSR built protections for vulnerable customers into two other parts of the rules, but not into the time limit. It reads that as a deliberate choice. And the rules say Pay.UK should keep the 13-month period "under review". FOS says that the job belongs to the regulator, not to FOS.

4. Unauthorised fraud is treated differently

FOS accepts that both regimes use 13 months but says they do different jobs. The unauthorised payment limit can cut off a bank's liability for its own mistake. The MRR limit decides whether two banks, neither of which may have done anything wrong, have to cover a loss caused by a criminal. So it won't apply the same flexibility.

What this looks like in a real decision

We've seen this reasoning applied in a real final decision issued in September 2026. A victim paid £3,500 to someone who promised to arrange a work visa sponsorship certificate. He reported it to his bank about 14 months after his last payment, and said problems with his banking app had stopped him finding the transactions sooner. The ombudsman said:

"I appreciate Mr O has said victims do not always immediately know they have been scammed and that he didn't intentionally delay reporting the scam. But there is no provision in the Reimbursement Rules for the time frame to be ignored in those kinds of circumstances. I think the rules are clear that firms are not required to reimburse payments reported more than 13 months after the date of the final scam payment of the claim."

The complaint was not upheld.

Why this needs fixing

FOS's reasoning is consistent. But it means the problem can only be fixed by the PSR changing the rules. 

Investment scams often collapse well after 13-months. Scammers sell fake bonds with two- to five-year terms. Nothing looks wrong until the money fails to come back. One of our clients, a 96-year-old later diagnosed with dementia, put over £425,000 into fake bonds and only found out when the first one "matured". Under the old rules, the full amount was refunded. Under the 13-month limit, it likely wouldn't be. It isn’t fair that new rules have significantly weakened the reimbursement rights of scam victims. 

The rule creates inconsistent outcomes for victims. One of the key objectives of the new Mandatory Reimbursement Rules was to try to create greater consistency for fraud victims. The previous scheme was criticised for inconsistency, and the new Mandatory rules should have solved that. However, this 13-month rule creates bizarre inconsistencies caused by the timing in which an investment fraud might collapse in relation to when a victim made a payment. 

Same scam, same lies, same receiving accounts. The only difference is the date on the transfer. The only consistency that we believe the new rules have created is that reimbursement rights of investment scams are consistently more inconsistent. 

Investment fraud victims are worse off than before. The old voluntary code (the CRM Code) had no 13-month limit. Our analysis of 594 investment fraud cases fully refunded under that old code found 66% would now be considered ineligible for reimbursement if they happened under the new rules. A scheme meant to protect more victims is shutting out exactly the ones who need it most, especially as investment fraud losses are the largest and most devastating in size. Unfortunately, our evidence shows that the introduction of the new rules has significantly weakened protection for scam victims. 

What we're asking the PSR to change

The PSR's December 2026 consultation will review how the reimbursement rules are working. We'll be putting forward two options. Either would fix the problem.

Option 1: Use the Ombudsman's normal time limits, and apply them to past claims. Replace the 13-month limit with the rule that already applies to every other financial complaint: six years from the payment, or three years from when you became aware (or should have become aware) of the scam. This should apply retrospectively, so victims already turned away since October 2024 can claim again.

Option 2: Only apply the 13-month limit where the victim was grossly negligent. If a victim acted reasonably, reporting late shouldn't cost them their refund. Gross negligence was part of the PSR's original proposals when the rules were being designed, but it was later dropped.

Both options keep the 50/50 split in place. That takes away the FOS’s main objection: late claims would be part of the scheme, not "voluntary" payments outside it.

Any change to the 13-month limit should include an express transitional provision allowing victims whose claims were rejected on the 13-month limit to resubmit them under the new rules. These victims were excluded not because their claims lacked merit but because the scam was designed so they couldn’t discover it in time, and the PSR’s own decision to revisit the limit acknowledges that the rule produced unfair outcomes. This is something we spoke about on BBC Moneybox with Dan Whitworth. 

Refundee is campaigning for change

Every week we see many APP fraud victims turned away because they reported the scam more than 13 months after it happened. This is almost always for completely understandable reasons. For example, they couldn’t have known it was a scam because the term of their investment was up, they were still being manipulated by the scammers, or didn’t know they had any right to a refund. We’re campaigning for change.

We’ve worked hard to make that case. We’ve been meeting consumer rights groups, charities, MPs, and advice services to explain how the limit works and the harm it causes. We even spoke with the BBC about it. Once they’ve seen the evidence, the response has been overwhelming. Our allies, like National Trading Standards, have started to talk about it publicly. They agree the limit is unfair, and they’ve backed our call to change it. We have also held meetings to discuss the matter directly with the Payment Services Regulator and we followed up with our evidence.

The banks benefit financially from the rule staying as it is. We suspect their response is being coordinated through UK Finance, the lobby group that represents the UK banking industry. It’s David vs Goliath, but the case for fairness is clear, and we believe change is possible.

If this impacts you, you can add your support

Regulators listen when they can see how many people are affected, and they are able to understand the impact. If you've been scammed, had a claim rejected because of the 13-month limit, or simply think the rule is unfair, add your name below. We'll keep you updated on when and how you can submit your thoughts to the regulator. You can do this regardless of whether you’re a customer of Refundee or not.

Of course, if you have any questions then just get in touch with us.