UK Finance – Authorised Push Payment fraud losses hit £456 million in 2019

With authorised push payment (APP) fraud soaring, UK Finance is calling for cross-sector cooperation on a problem that still results in most victims not being reimbursed by banks, despite a recently introduced voluntary code of conduct. In 2019, there were 122,437 APP fraud cases in the UK, with losses hitting £456 million, up from £354 million in 2018. Financial providers returned about a quarter of losses – £116 million – to victims, according to finextra.com.

To help tackle the APP crisis, industry body UK Finance is calling for fraud to be included in the new Online harms regulatory framework being proposed by government.

In the meantime, UK Finance says that things are improving, with more money being reimbursed to victims under the voluntary Contingent Reimbursement Model code, in place since May 2019, which compels banks to reimburse blameless victims.

Under the code, cases involving £101.1 million in losses were assessed, with £41.3 million (41%) reimbursed.

Katy Worobec, MD, economic crime, UK Finance, says: „The introduction of the voluntary Code last May has meant more victims of authorised push payment fraud are receiving compensation, particularly in cases involving higher value losses and more sophisticated scams.”

While some progress in being made on reimbursements, the industry has come under fire for its efforts to stop the fraud before it happens.

Consumer watchdog Which? accused banks of lagging in implementing anti-fraud measures. Confirmation of Payee is set to be introduced by the UK’s six major banks by 31 March, ensuring that a check is made on whether or not the name a customer enters when making a payment matches the account details it is being sent to.

So far, however, only Bank of Scotland has gone live with the programme. Bank of Scotland parent Lloyds Banking Group and Halifax will follow, while Barclays has informed customers that it will be implementing the scheme at the end of the month.

Upon questioning, Which’s says that RBS Group (including Royal Bank of Scotland, NatWest and Ulster Bank) and HSBC (including First Direct) were unable to confirm a specific date when asked if they would be ready by the regulator’s deadline. Metro Bank told Which? that it has no current plans to implement CoP at all.

Which? believes the code and CoP should be made mandatory and that the government must consider directing the PSR to ensure all banks are signed up.

Meanwhile, UK Finance is telling the public to expect an uptick in APP scams, as crooks use the publicity surrounding Covid-19 to pose as genuine organisations such as the WHO through email, phone calls, texts and social media posts.