Authorised push payment (APP) fraud losses have fallen by an estimated £73 million annually, according to a review into the impact of rules requiring banks to reimburse victims.
APP fraud happens when people are tricked into transferring money to criminals for a variety of reasons, such as impersonation fraud, purchase scams, romance scams and investment scams.
In October 2024, mandatory APP fraud reimbursement rules came into force.
The rules mean banks must reimburse APP fraud victims, unless the customer has been grossly negligent.
The protections apply when a transfer is made to and from a UK bank account and a reimbursement limit of £85,000 has been applied under the rules, although banks can choose to go further than this and repay higher amounts.
The publication of APP fraud performance data, first published in October 2023, also increased transparency over firms’ APP fraud handling.
The evaluation report from Frontier Economics indicated that, even after accounting for increased costs to payment service providers, there is a positive benefit.
The report said: “Consumers are better protected overall with an estimated consumer net benefit of £73 (million)/year from improved reimbursement and reduced APP fraud.”
David Geale, managing director of the Payment Systems Regulator, which commissioned Frontier Economics to carry out the research, said: “The evidence is clear – APP reimbursement is working.
“Payment fraud losses are down, more victims are being reimbursed, and firms are investing in prevention.”
The new figures follow the release of separate data from banking and finance industry body UK Finance in June.
According to the UK Finance figures, APP fraud losses rose sharply last year to reach £576.4 million – a 19% annual increase.
The discrepancy reflects the differences in the way the data was collected.
Frontier Economics analysed scam activity in the period when it happened, rather than when the claim was made or closed. UK Finance uses the date the claim was closed by the payment service provider (PSP).
UK Finance said there can be long lags between the victim realising they have been defrauded and reporting it to their PSP, such as with romance and investment scams, which UK Finance’s 2026 fraud report said are increasing significantly.
On average, victims of romance scams can make around 10 payments before they realise they have been a victim of fraud, UK Finance said.
Ruth Ray, managing director of economic crime at UK Finance, said: “Fraud operates on an industrial scale, causing serious harm to consumers and businesses.
“For certain scams, particularly investment and romance fraud, victims may only realise they have been deceived a long time after the transaction has taken place.
“Transaction-date data alone will therefore give an incomplete picture of fraud.
“Only the banking sector reimburses victims, but this is not stopping fraud and it’s clear the underlying problem is still not being tackled effectively.”
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