Industry Survey Finds APP Fraud to be
the UK’s Biggest Threat

Authorised Push Payment (APP) scams happen when someone is tricked into sending money to a fraudster. There are various types of APP scams, such as getting deceived into purchasing goods that don’t exist or won’t be delivered or falling victim to fraudsters who pretend to be bank staff to convince you to transfer funds from your account to theirs.

Scammers use manipulative tactics and social engineering to persuade their victims to urgently or regularly transfer money from their bank accounts. The immediate transfer allows the scammer to quickly move the money to another, often overseas, account, making it extremely difficult to recover the funds. This can result in huge financial losses for the victim.

The PAS surveyed UK payment industry businesses who attended the PAY360 event in London in March 2024, including banking providers, crypto services, and technology companies. The results highlighted:

• Two-thirds of the UK’s payments industry believe that scams are the most significant fraud issue.
• 39% said that the biggest type of fraud likely to impact the payments industry in 2024 would be APP Fraud.
• Last year, fraud victims lost £1.2 billion to scammers, with £459.7 million attributed to APP scams. This represents a 12% increase in cases, totalling just under a quarter of a million (232,429), although the total amount lost dipped slightly compared to the previous year.

Riccardo Tordera, Director of Policy and Government Relations for The Payments Association, said:

The problem stems from how many people a fraudster can target with that message: years of data leaks mean that bad actors can get tens of thousands of phone numbers for very little, and if a fraud attempt is only 1% effective, it could still cost hundreds of people thousands of pounds. In short, it isn’t the sophistication but the scale of APP fraud that is most worrying.

The increase in scams has made the Payment Systems Regulator (PSR), the UK’s economic regulator of payment systems, introduce new rules that will take effect in October 2024. Under these rules, payment service providers will be responsible for reimbursing customers for any losses resulting from APP fraud.

If you have been scammed, it is essential that you stop communicating with the scammers and immediately report the fraud to your bank, police, and Action Fraud, the UK’s national reporting centre for fraud and cybercrime. A criminal investigation may follow.

Your bank will conduct an initial investigation, and you may be eligible for a refund. The Payment Systems Regulator published data at the end of last year on refunds paid by some of the UK’s biggest banks.

If you have lost money through a push payment scam and your bank is not prepared to refund you, you can take this further by making a complaint to the Financial Ombudsman Service (FOS). FOS is an independent, government backed service that resolves disputes between consumers and financial businesses. FOS has the power to award compensation if it finds that a bank has failed to protect a customer from APP fraud.

There have been an increasing number of upheld claims against banks. If your bank failed to take adequate measures to safeguard your money from fraud, you may be eligible to make a refund claim.

Sarah Spruce, Legal Director and Head of the investment scams and APP fraud team at TLW Solicitors, commented on the reported data:

The statistics demonstrate the widespread problem of APP fraud in the UK. We have helped many clients who have suffered huge financial losses due to scammers. I strongly advise anyone to be cautious when approached out of the blue with too-good-to-be-true opportunities.

If scammers have targeted you or a loved one, you must not feel embarrassed or ashamed. Remember, you are not alone, and there is specialist help available. Don’t hesitate to contact my team for a no-obligation discussion to explore your options and find out if you can make a ‘no win, no fee’ claim.