Caroline Greenwell writes for Retail Banker International on authorised push payment (APP) fraud
Authorised push payment (APP) fraud continues to cause significant headaches for consumers and financial institutions alike.
APP fraud occurs when a fraudster will trick a victim into making a bank transfer to them, for example, by posing as a trusted organisation and encouraging the victim to send money to an account under the fraudster’s control, usually having intercepted legitimate correspondence between the victim and a third party (a conveyancer, for instance).
In 2023 alone, data published by the Payments System Regulator (PSR) revealed that APP fraud amounted to a loss of £341m to UK consumers.
In light of this, new rules have come into force (from 7 October 2024) which require banks and other payment companies to reimburse fraud victims who have been tricked into sending money to scammers, up to a maximum of £85,000.
But despite these new rules working to improve fraud prevention and increase focus on customer protection, there are clear challenges on the horizon for consumers and financial institutions.
Caroline Greenwell, Partner, writes an article for Retail Banker International on the benefits of the new regulations and the challenges ahead/potential unwanted consequences of the regime.
She says:
The new rules to combat APP fraud are largely seen as a positive step toward reducing financial scams and offering consumer protection, but they come with trade-offs in terms of cost, privacy, and convenience.
"Balancing consumer protection with the potential impacts on operational costs and user experience remains a challenge for the entire financial sector.
"Consumers in the UK deserve the right to world-leading protection, and payment providers are heavily incentivised to improve anti-fraud protections and we maintain effective market competition and innovation.
"Only time will tell as to the success of these changes and how this impacts fraud in the UK overall.
Read the full piece in Retail Banker International here.
