UK payments firms pull APP fraud scheme

Payments firms operating in the UK have argued that plans to protect victims of APP fraud should be reconsidered, arguing that the £415,000 refund limit would hurt smaller providers.

What is APP fraud?

During an APP scam, criminals manipulate victims into making payments or sharing personal information under false pretenses. Scammers often pose as a well-known legitimate business or government agency to gain the victim's trust. These scams are called 'authorized' because they rely on the victim voluntarily transferring money. However, this does not mean that APP scam victims are to blame; Victims of fraud can claim back their losses.

APP fraud has quickly become one of the top forms of fraud in the UK, with losses totaling around £500 million last year. Consumer groups and politicians are calling on banks to tackle this growing epidemic and speed up the process of reimbursing unsuspecting victims.

The UK Payment Systems Regulator has set a maximum refund amount of £415,000, which will ensure that the majority of money lost in APP scams is refunded to victims as part of its anti-fraud efforts from October.

According to Bloomberg, the Payments Union Group wrote a letter to Treasury Economy Minister Bim Alami to protest the cap and said that it was "absolutely not proportionate".

The letter, signed by around 30 firms, calls for a ceiling amount of £30,000, which is in line with the average loss in APP fraud cases. The letter also warns that refunds may not be ready until October.