By George Ralchev
Fraudsters are becoming more sophisticated in the ways in which they try to get unsuspecting victims well-earned money. Many may even go as far as to pretend to be someone they are not by using social-engineering techniques to deceive or confuse victims. One example of a scam that is becoming increasingly more popular with fraudsters is Authorised Push Payment (APP) fraud.
Put simply, APP fraud is where a fraudster convinces a victim to authorise a payment under false pretences. Various techniques can be used to deceive or confuse victims into making payment transfers and there are many types of APP scams – such as impersonation scams, ticket scams and romance scams. All of these have the potential to not only cause monetary harm but to also leave victims feeling hopeless and embarrassed.
For many consumers, APP scams can feel so realistic that they authorise payments without a second thought. This is because criminals leverage sophisticated tricks, using social engineering or enhanced AI tools, to make sure the transaction feels as authentic as possible. To limit fraudulent activity, consumers must develop habits such as ensuring they always verify that funds are being sent to the genuine payee before making payments. Taking time to ensure a payment request is legitimate and thinking twice is key.
Consumers can also leverage services from their banks such as setting transfer limiting in their bank accounts to ensure they are making a secure payment. However, they shouldn’t rely on these services alone. It is essential that everyone understands APP fraud and how it can be mitigated. To help equip consumers with the right guidance and ensure they can spot fraudulent activity, keep reading to find out my top five tips on how to avoid APP fraud.
1. Use Confirmation of Payee (CoP) services
Confirmation of Payee (Cop) is a service provided by most UK banks that verifies payee details before a payment. CoP checks that the account number and sort code match the name you have been given, which is critical as in APPF scams, the fraudster will often use a fake name. Fraudsters rely on consumers skimming over these notifications, or even ignoring them, but don’t! This simple step could stop you losing thousands of pounds.
2. Scrutinise ‘urgent’ payment requests from familiar contacts
APP fraudsters may pretend to be someone you know, such as a friend, family member, or colleague, and create a sense of panic with an “urgent” request. They use the urgency to distract you from the message not sounding exactly like your friend – maybe the tone of voice is off, or they’re using more formal language than usual. To protect yourself, always confirm urgent payment requests through a different communication channel than the one used to make the request. If they WhatsApp you, call them!
2. Add payment limits through your banking environment
Many banking apps allow you to set daily or per-transaction payment limits, which reduce exposure to large losses. This is highly recommended to easily monitor and enable real time transaction alerts via text, email or in-app notifications.
3. Double check retailer credentials
Monitor official and verified review sites, like TrustPilot, to see if others have flagged issues with a particular company, phone number, email address or similar payment requests. And ask your friends and family – have they ever placed an order with this retailer or the respective third-party details? What were their experiences? This is especially important for cross-border purchases
4. Ensure protection and eligibility under new PSR guidelines
Take the time to read your bank’s policies on how it handles APP fraud reimbursements. In line with new regulation, banks must now reimburse you if you were a victim of APP fraud, but you must report it within 13 months of the transaction occurring (although the sooner, the better). You must also be prepared to prove that you are a legitimate victim under PSR rules. If you suspect you have been a victim of APP fraud, make sure you keep records showing you verified the recipient’s identity, such as screenshots of confirmations or email exchanges. Document any steps taken to ensure the legitimacy of the request, as these can prove you acted responsibly.
APP fraud has become an increasingly popular tactic to scam victims out of money, now representing about 40% of all payment fraud in the UK. The issue is so prevalent that, in late 2024, new UK regulation came into force requiring banks to reimburse consumers who are proven victims of APP fraud, to a maximum limit of £85,000.
As scammers increasingly use more sophisticated and realistic tactics, it is crucial that consumers take advantage of the tools that their banks have available, as well as develop their own awareness of the common ways scammers will try to take their money. Hopefully, these tips will help consumers to pause, think and always check legitimacy before sending money to someone.
About the Author
George?Ralchev, Head of Risk Management at emerchantpay,?is an experienced risk expert, who has specialised in the risk management of eCommerce, card transactions and alternative payment methods for over 15 years. In addition to this, he has strong expertise in fraud prevention, credit risk, card scheme compliance and anti-money laundering.?George?leads emerchantpay’s risk management division, ensuring that risk services and products are delivered to an exceptional level, while empowering our partners and merchants to thrive and grow beyond borders.
#Tips #Avoiding #Authorised #Push #Payment #Fraud