APP fraud - less talking, more acting

Authorised Push Payment (APP) fraud is probably top of many fraud teams? priority lists for 2021, and is one of the most prevalent fraud types of the moment. UK Finance's Fraud: The Facts 2020 highlighted that UK banks and their customers lost £456 million in 2019 to APP fraud, an increase from £354 million in 2018. The growth of this type of fraud has been exponential and shows no signs of abating.

In addition, the publication of the Voluntary Contingent Reimbursement Model (APP CRM) in 2019 set out increased consumer protection standards to help reduce the number of APP scams, and importantly any customer of a Payment Service Provider which is signed up to the Code could expect to be reimbursed where they were not to blame for the success of a scam. In all, over £43 million was paid out in direct compensation to victims of APP fraud in 2019.

Christine Farrow, Payment Scheme Fraud Prevention Lead in the Economic Crime Team at UK Finance, and Anthony Minshull, Fraud Analyst and Product Manager at Synectics Solutions, came together at the end of 2020 to discuss what kind of action needed to be taken to address this rising threat.

The podcast, available to download here, highlights the need to readdress industry focus from debating levels of liability for APP fraud, and instead to put more investment into finding organisational and technological solutions that will prevent this type of fraud from taking place.

Our experts discuss some of the ways in which banks can collaborate better, as well as identifying some straightforward suggestions to the way that the industry processes payments.  It is hoped that these are the type of changes that could significantly reduce the impact of APP fraud.

The debate covers the increasing pressure from the public and government to get social media platforms to take a much more responsible role in accepting some of the liability for this type of fraud. Given that their platforms are often used to enable APP scams occurring online and the recruitment of money mules their involvement in combatting this type of fraud is critical.

A number of preventative initiatives have been implemented across the payment network but they have only had a marginal impact on APP. Christine and Anthony consider why these have failed in APP reduction - and what needs to change.

  • Enabling customers to delay faster payments, by a pre-determined period of time, was one of the first initiatives to be adopted (for first-time payee transfers). The intention was to provide customers with some breathing space to reflect on money transfers they had made. However, as most APP scams can take days or weeks to come to the surface this didn't have the intended impact. 
  • Confirmation of Payee (CoP) was another 2019 initiative, implemented by the UK's Retail Payment Authority ( This simple checking of the account name for the payment destination did go some way to help in stemming the flow of rogue payment destinations. Not surprisingly, fraudsters have easily found a way to circumvent this rudimentary checking process, helping to fuel the growth of money mules as a response.
Area of expertise:

International Diploma in Financial Crime Prevention

This advanced level course will better equip you to meet the many challenges associated with identifying, understanding and mitigating financial crime risks including fraud, cybercrime, corruption, money laundering and terrorist financing. It will deepen your understanding and enhance your professional credibility.

Learn more Read more