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Summary

In October 2023, the Payment Services Regulator (PSR) published 2022 performance data on authorised push payment (APP) fraud.

The data includes the UK’s 14 largest banking groups along with nine smaller firms who were among the twenty firms who saw the most instances of APP fraud.  It covers the following:

• Reimbursement of fraud victims (from the largest 14 banking groups)
• The amount of money sent from each payment firm as a result of APP fraud (from the largest 14 banking groups)
• How much money is received by each payment firm as a result of APP fraud (all payment firms in the UK).

The percentage of total APP fraud losses by value that were reimbursed to consumers in 2022 varied from 91% for TSB down to 10% for Allied Irish Bank. By volume it varied, for full reimbursement, from 94% for the TSB down to 6% for Monzo Bank.

The average figures for customer losses per million pounds sent, varied from £348 for TSB down to £23 for Allied Irish Bank.

Other key points highlighted in the report were:

• Customers who report APP fraud to their PSP experience inconsistent outcomes
• Receiving fraud data shows significant variation and fraudsters exploiting weak controls
• Firms have begun to address gaps in controls, but more needs to be done.

The PSR has adopted a multi-pronged approach to APP fraud across payment systems. It has undertaken to monitor all firms’ performance through the data collected and it will work with the FCA to address any poor performance through targeted action plans to drive better outcomes for consumers. The FCA has made stopping the increase in APP fraud a business plan priority.

The PSR will introduce a new mandatory reimbursement requirement in 2024. Its central proposal is that mandatory reimbursement obligations will apply to all APP fraud cases above a threshold no higher than £100 (PSPs would be able to apply a lower threshold if they wish), other than for cases where customers are involved in the APP fraud or have acted with gross negligence. The PSR also expects PSPs to introduce the capability for intelligence sharing in Q1 2024.

Links: https://www.thistleinitiatives.co.uk/blog/psr-publish-app-fraud-performance-data