The Average Amount Lost to APP Scams in the UK is on the Rise

The figures, published by HSBC, show an increase in average scam value across the board, not just with romance scams. Scam victims also lost an average of:

• £27,680 to investment scams
• £17,787 to impersonation scams
• £894 to purchase scams

David Callington, HSBC UK’s head of fraud, said:

“According to what we have seen, while scammers appear to have ramped up the amount of money demanded across most of the different types of scam, the actual number of cases seen has remained relatively steady.

In most cases, seeing the spread of activity, it is obvious that social engineering plays a big part in the way scammers get their hands on your hard-earned cash.”

Social engineering is the use of manipulation to convince someone to willingly perform actions or divulge personal information for nefarious purposes.

The majority of romance, impersonation, and purchase scams involve an element of Authorised Push Payment (APP) Fraud, which is an increasing and sophisticated form of cyber-fraud.

APP scammers use social engineering techniques to convince their victims to authorise genuine bank transactions for purposes that – at the time – the victim believes to be legitimate, such as:

• Paying a bill
• Transferring money to a ‘romantic’ partner
• Investing
• Setting up for a new job role

The scammers then move the money on, often to an overseas account, and it can become very difficult or even impossible to recover. By the time the victim realises they’ve been scammed, the money has gone, and the scammer has probably moved on to someone else.

APP scams can take a range of forms, and scammers are constantly changing and developing their tactics, so it is essential to stay up to date with the types of fraud out there. Some of the most common types of APP scams include:

• Romance scams – these often involve meeting through online dating apps and then using manipulation to build a romantic relationship and trust with the victim. This then develops into requests for money by bank transfer or cheque.
• Impersonation scams – cybercriminals use sophisticated techniques to deceive their victims into thinking they are their trusted advisers, such as a solicitor or accountant, then persuade them to make payments such as an invoice or payment on account.
• Investment scams – victims are offered cryptocurrency investments or other schemes, having been promised very high or guaranteed returns.
• Employment or recruitment scams – job seekers are targeted by fraudsters posing as recruiters and offering impressive salaries for seemingly simple work. Often, they will require payment upfront for setting up equipment, opening accounts, or admin work.
• Conveyancing scams – scammers intercept communications between the victim and their conveyancing solicitor and pose as the latter, convincing the victim to transfer their funds to ‘new bank details’.
• “Dear mum and dad” scams – a common type of impersonation scam where a text message comes from an unknown number, claiming to be from your child who has lost/broken their phone and asking for short-term money.

These are not the only types of APP scams, but they are the most common types we see from our clients. For the latest news about APP scams, keep an eye on our blog and social media channels.

If you think you’ve been targeted by any kind of APP scam and have lost money as a result, the first thing to do is report the scam to your bank, Action Fraud – the national reporting centre for fraud and cybercrime – and the police.

Your bank will investigate the loss, and, in some cases, refunds will be available, but unfortunately, they may also conclude that the scam was not their responsibility and will refuse to refund the loss.

However, given the growing prevalence of online scams and money laundering, banks – as industry experts – do have a duty of care to their customers to prevent scams and fraud from taking place on their accounts. There have been an increasing number of cases where banks have been found to have failed in this duty, and customers have been compensated.

Disputes between financial institutions such as banks and their customers can be independently investigated by the Government-backed Financial Ombudsman Service (FOS), which is responsible for adjudicating disputes between financial services providers and their customers. FOS has the power to make compensation awards, putting fraud victims back in the position they would have been in had the fraud not happened.

Sarah Spruce, Head of the dedicated APP fraud and scams team at TLW Solicitors commented:

“The HSBC findings mirror our own observations with our APP fraud clients; scammers are using sophisticated social engineering techniques to convince victims to part with eye-watering amounts of money. We’ve helped victims of romance scams, employment scams, impersonation scams – you name it – and the tactics used to reel them in are constantly changing and adapting to get around bank security measures. But since the scammers are evolving, the banks should be too, so if your bank refuses to refund you after an APP scam, get in touch with my team to see if there is any way we can help. Don’t be ashamed or embarrassed, these scams are happening all the time and as these figures show, are impacting a lot of people.”