Which? A consumer rights and protection website has analysed new data and says that every hour, APP fraud (Authorised push payment fraud) victims lose more money than the average UK worker earns in a year.
The research calls on the government to urgently act on its commitment to legislate for mandatory reimbursement of victims.
Authorised push payment fraud (APP) – where a scammer tricks you into transferring money to an account they control – is now more common than card fraud, but protection against these scams still lags behind.
The voluntary Contingent Reimbursement Model (CRM) Code was an important milestone for victims when it was introduced in May 2019, but Which? has found that banks apply the standards of this Code inconsistently or unfairly blame victims.
APP fraud reaches record level
In H1 2021, losses to APP fraud hit £355.3 million, overtaking card fraud for the first time. Which?’s analysis of UK Finance figures show that between July 2019 and the end of June 2021 a total of £854 million was stolen in 306,573 cases of APP fraud, and only 42% of losses were reimbursed.
That means the net loss to victims is a shocking £495 million – a rate of £4.7 million a week or £28,203 an hour, more than the average UK salary (£25,971).
This is the £1billion problem in our payments industry. More work needs to be done on prevention rather than reimbursement. Educate and mandate,” says Ed Adshead-Grant, MD, Bottomline Technologies Europe.
“The Confirmation of Payee (CoP) is available TODAY for payment players to plug in and slow or remove APP fraud. Just like EMV chips on our bank cards, CoP has to become ubiquitous in the ecosystem – let’s not wait for the £2 billion threshold next year, before we act to protect consumers and businesses.”
“When your bank’s app is in your phone, you are carrying their software (SaaS). Essentially, you’re carrying a miniaturised branch around in your pocket and we need to be maximising the advantage of this,” continues Giles Sergant, an independent payments consultant.
Applying modern use of in-app messaging or message-based-chat would make the phone line…would be trivial to ping an app (push) notification and then serve up the ‘last three transactions’… “Did you spend £15.22 at Aldi in Jesmond yesterday?” or whatever, in the App with a Y/N? field.
No phone call required, utilising SCA (instead of the first two characters of your mother’s maiden name etc) and strong assurance for the account holder that they’re communicating directly with their actual provider.”
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