
George Iddenden
Journalist, The Payments Association
Fraud is rising globally as technology enables more sophisticated scams. Authorised push payment (APP) fraud, the largest payment fraud in the UK, caused £459.7 million in losses in 2023 (UK Finance, 2024).
According to The Payment Systems Regulator (PSR), in 2023, purchase scams (a form of APP fraud), accounted for 68% of reported incidents, causing over £72 million in losses.
Authorised push payment fraud risks
APP fraud occurs when someone is tricked into transferring money directly to the account of a fraudster. Often taking the form of fake investment opportunities on search engines and social media, fraudsters transfer the funds to overseas accounts, making recovery difficult. Beyond harming consumers, APP fraud can also damage businesses, eroding trust, customer relationships and reputation.
Combatting APP fraud
Preventing APP fraud is difficult since scams originate outside the financial sector, limiting banks’ ability to stop them at source. Social media platforms face criticism for insufficient action on APP fraud. While many platforms have introduced measures such as scam warnings, improved ad vetting and user education initiatives, these efforts are seen as reactive measures.
A lack of cohesive Know Your Customer (KYC) and Anti-Money Laundering (AML) standards across countries also exacerbates the issue, with fragmented data-sharing practices between Payment System Providers (PSPs), telcos and social media firms compounding the problem.
Preventing APP fraud is difficult since
scams originate outside the financial sector.
PSR reimbursement scheme
The PSR reimbursement scheme, requiring firms to reimburse victims of APP scams up to £85,000 while not addressing the root cause, provides a degree of relief.
PSR rules reduced claim resolution times from up to two years to five days, ensuring most victims are reimbursed. However, smaller disruptors face financial strain, risking competition, financial inclusion and the UK’s fintech reputation.
To balance consumer protection with industry sustainability, many in the industry called for a 12-month review to address consumer care standards, regulatory thresholds and the role of social media. While Meta’s FIRE initiative represents progress, it doesn’t hold social platforms financially accountable, leaving payment firms to address the issue.
Creating a safer payments ecosystem together
The Payments Association (TPA) plays a pivotal role in driving a cross-sector approach by championing industry collaboration, advocating robust data-sharing frameworks and backing legislative initiatives like the Smart Data Bill. Through these efforts, TPA aims to create a safer, more resilient payments ecosystem, protecting consumers and businesses from fraud.