In 2023, Authorised Push Payment (APP) scams totalled just shy of £341million in the UK, with new research highlighting that reimbursement varies significantly depending on who consumers bank with.
These findings come from the latest performance report by the Payment Systems Regulator (PSR), tracking the performance of payment firms in tackling APP scams and reimbursing victims in 2023.
In 2023 alone, 4.5 billion transactions were made using the Faster Payments system. In the same year, victims reported 252,626 cases of APP scams – but not all reports resulted in refunds from their banks.
Under the existing voluntary reimbursement framework, 67 per cent of money lost to APP scams was reimbursed. While this has improved between 2022 (61 per cent) and 2023 (67 per cent), the PSR reveals there is still an inconsistent approach by firms when it comes to reimbursing victims of APP fraud.
“We can see some positive changes with more victims being reimbursed than in 2022. But there is still more to do – particularly for some smaller firms which have much higher rates of receiving fraud than larger firms,” explained David Geale, managing director of the PSR.
Nationwide fully reimbursed 96 per cent of the APP scam cases, followed by TSB which fully reimbursed 95 per cent of cases and Barclays (82 per cent of cases). On the other end of the spectrum, AIB only fully reimbursed three per cent of cases, while Danske Bank fully reimbursed seven per cent, and Monzo fully reimbursed nine per cent.
Typically, smaller firms receive disproportionately higher rates of APP scams compared to the 14 largest banking groups in Great Britain and Northern Ireland. For every £1million sent by customers of Lloyds, Bank of Scotland and Halifax, £228 was lost to APP scams. Meanwhile, for every £1million received into Skrill accounts in 2023, £18,550 was from APP scams.
A vital step towards addressing APP fraud
Ryta Zasiekina, founder of payments firm CONCRYT
“The PSR APP Fraud league tables are a crucial tool for monitoring which organisations are leading the fight against APP fraud,” explains Ryta Zasiekina, founder of payments firm CONCRYT. “These types of fraud have a profound impact on victims, not only in terms of monetary loss but also in the emotional and psychological toll they exact. It’s encouraging to see which organisations have significantly improved their performance from last year, and equally important to identify those that continue to struggle in protecting consumers.
“Notably, while other types of APP scams are declining, romance scams are on the rise, indicating a pressing need for increased efforts to combat these crimes. The government must intensify its awareness campaigns, and payment firms need to enhance their protective measures. These league tables represent a vital step towards addressing these issues and ensuring accountability among firms.”
‘Victims are still facing a reimbursement lottery’
As seen in 2022, the PSR highlights inconsistent outcomes for customers reporting APP scams to their bank or building society. While some automatically reimburse in full, others may only make a partial reimbursement leaving victims to bear part of the loss, and others will only accept claims subject to very narrow circumstances.
Overall, there has been an improvement in consumer outcomes as reimbursement by value has increased from 61 per cent in 2022 to 67 per cent in 2023. These results were largely driven by members of the Contingent Reimbursement Model (CRM) – a voluntary code that sets guidelines on how firms reimburse victims of APP scams. CRM members reimbursed 68 per cent of fraud value back to consumers in 2023.
Rocio Concha, director of policy and advocacy at Which?
Rocio Concha, director of policy and advocacy at consumer champion Which?, said: “The PSR’s report acknowledges levels of performance vary hugely depending on which bank a consumer uses, so while there have been some improvements, fraud victims are still facing a reimbursement lottery and some firms are clearly way off the pace.
“The government and the regulator have faced heavy lobbying by sections of the industry to push back against the new mandatory reimbursement scheme which will see the vast majority of scam victims get their money back.
“These figures clearly show these new rules cannot come soon enough and must not be delayed. Consumers are being targeted by highly sophisticated scams, that they can often do little to protect themselves from. The UK is in desperate need of these protections which have been years in the making and will play a vital role in the fight against fraud.”
Making changes in response to PSR pressure
Last year’s PSR report revealed that global payments provider Clear Junction had the highest value of APP fraud received per £1million of transactions for non-directed payment service providers.
“Since the launch of the report, we have strengthened our collaboration with UK banks and the PSR, working closely with the PSR to analyse the transactions listed in last year’s report. As a result of these efforts, we are pleased to see that Clear Junction has not only shifted from the number one position, but we have dropped out of the top 20 entirely,” Clear Junction revealed in a new statement.
The payments provider explained that it increased its focus on combatting APP fraud, and has implemented new measures to do so. In the last year, it has launched Confirmation of Payee (CoP) to verify account users, and achieved the globally recognised ISO27001 data security standard, the highest standard for information security.
This response highlights that it is very possible for firms to swiftly implement changes to enhance protections for customers. While this is promising, questions will arise whether the PSR and other regulators need to increase pressures in order to achieve results.
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