Scam warning: Britons fall victim to payment fraud – ‘devastating amounts of money’

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The Payment Systems Regulator (PSR) is sounding the alarm that thousands of individuals and businesses are at risk of Authorised Push Payment (APP) scams. This particular example of fraud involves people being tricked into parting ways with their money to an account controlled by a scam artist. An example of this would be a fraudster pretending to be a representative from someone’s bank in a bid to convince someone to give them their money.

As part of APP scams, the account holder is responsible for authorising the payment to be made to another account.

According to the latest figures from UK Finance, £355million has been lost to APP scams in the first half of 2021 alone.

This shocking number has overtaken the amount of money lost to card fraud scams over the same period of time, representing a 71 percent rise.

On top of this, the regulator is warning that a large number of accidentally misdirected payments through APP scams have yet to be recovered.

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In light of this continuing crisis, the PSR is calling on financial institutions to put measures in place to stop fraudsters from getting away with these scams.

As part of its latest consultation, the regulator published various proposals which include banks having to publish all fraud data to determine how successful they are at protecting their customers from APP scams.

Furthermore, the PSR is pushing for greater scam protections, and for the financial services industry to improve their ability to detect and predict potential fraud.

Finally, the payment regulator is calling for the full reimbursement of any money lost from APP scams once specific legislative changes have been made.

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Last week, the Treasury confirmed that changes to the law which would allow this reimbursement to take place will be made in the near future.

John Glen MP, the Economic Secretary to the Treasury, outlined what the Government is hoping to achieve with its crackdown on APP fraudsters.

Mr Glen said: “Push payment fraud is posing an escalating risk to UK customers, with increasingly sophisticated scams that can be detrimental to people’s lives.

“The Government’s position is that liability and reimbursement requirements on firms need to be clear so that customers are suitably protected.

“It is welcome that the Payment Systems Regulator is consulting on measures to that end, and to help prevent these scams from happening in the first place.

“The Government will also legislate to address any barriers to regulatory action at the earliest opportunity.”

Chris Hemsley, Managing Director of the PSR, added: “The growing problem of APP scams has seen people lose devastating amounts of money.

“More needs to be done and while voluntary industry measures have helped some victims, there are many institutions which have yet to step up to the mark and protect people properly – including social media firms.

“The range of steps we plan to take will show people which banks and building societies are likely to respond to frauds in the right way and will put the onus on financial institutions to get better at detecting and preventing scams.

“We are also setting out the way to make reimbursement mandatory for those blameless victims so that, when the law is changed, we are ready to act as quickly as possible to get protections to the people who need them.”

Organisations, such as UK Finance, hope the Government’s Online Safety Bill presents an opportunity for scams like APP fraud to be taken seriously.

Parliament is currently scrutinising the bill which would see the Government gaining the power to block harmful online content, which could help prevent further scams in the future.

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