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Cases of authorised push payment (APP) fraud fell by a fifth in the UK last year thanks to investment in fraud prevention by businesses, according to a report from UK Finance.
The latest figures show that the value of losses to APP fraud fell to £450.7m in 2024, the lowest since 2021.
The industry body said the drop was the result of a number of interventions, particularly the large and ongoing investment in fraud protections by the banking and financial services industry.
Mandatory reimbursement rules
APP fraud spiked during the pandemic and the value of losses has been on a declining trend since 2021, although cases continued to rise, peaking at more than 230,000 in 2023, UK Finance said.
The Payment Systems Regulator’s (PSR) mandatory reimbursement rules for APP fraud became an actionable compliance requirement for banks, payments and e-money firms operating in the UK on October 7, 2024.
As these split the cost of reimbursement for APP fraud 50/50 between the sending and receiving financial institutions, organisations on both sides of the transaction have been incentivised to identify scams in real time.
However, UK Finance stressed that the decline in cases and value of APP fraud began well in advance of the implementation of new PSR rules and highlighted a range of actions being consistently implemented across the industry.
It noted that, in preliminary reporting, the PSR found that 86 percent of money lost to APP scams that were in scope of its rules was returned to victims between the policy becoming operational on October 7 and the end of 2024.
Ben Donaldson, managing director of economic crime at UK Finance, said fraud was a continued blight on the country.
“To deal with this threat, we need a more proactive approach with the public and private sectors working more closely together and using data and intelligence more effectively,” he said.
“We also need the technology and telecommunications sectors to step up and actually fight the fraud originating on their platforms and networks.”
The report found that the style of APP fraud had changed since 2013, when it was characterised by increasing volumes of lower value, mostly purchase scam cases.
But heightened industry attention on APP fraud has seen criminals seeking to extract larger sums from more profitable scams.
As APP fraud has declined, remote purchase fraud has increased, likely signalling a shift in fraudsters’ tactics, UK Finance said.
Sophisticated tactics
Erin Sims, financial services senior analyst at RSM UK, said that fraudsters are targeting more victims with increasingly sophisticated tactics.
“The rise in remote purchase fraud and the evolving nature of authorised push payment scams signal that criminals are adapting rapidly and leveraging scalable, low-cost tools to automate social engineering, mimic identities and exploit vulnerabilities at an unprecedented speed.”
She added: “This reinforces the need for a joined-up approach across the entire ecosystem, where financial institutions, tech platforms, telecoms providers and regulators work in unison to disrupt fraud at its source.”
The extent to which responsibility for APP fraud is shared between payments firms and telecoms and technology firms has been a sensitive issue.
In January 2025, the highly interventionist Protection from Scams Bill was passed in Singapore’s parliament, enabling police officers and commercial affairs officers to issue restriction orders to banks.
These restrict an individual’s banking transactions if there is reason to believe they will transfer money to a scammer.
However, in February, advocates for the technology industry warned that the European Parliament’s push to include social media and telecommunications firms in the Payment Services Regulation (PSR) fraud regime are misguided, and could backfire for consumers.
However, in April, following a UK lawmaker’s warning that social media companies are in a "last chance saloon", some of the biggest names in technology, banking and telecommunications pledged to strengthen their intelligence-sharing efforts to combat fraudsters.
The decline in APP fraud as scammers turn to other methods emphasises the importance of a joined up, comprehensive approach to fraud detection and prevention.
Regulators and financial institutions in the UK and elsewhere will need to maintain a high level of focus on addressing the issue of fraud, and additional regulation that brings other types of organisation into scope may be part of the equation.
