The Payment Systems Regulator (PSR) warns that authorised push payment (APP) scams are a growing concern, saying that more needs to be done to address the problem. According to the PSR, data on APP scams is incomplete but it's believed that tens of thousands of people have lost hundreds of millions of pounds in such scams. “It is evident that this type of scam is a growing problem that needs to be tackled,” said the PSR's Hannah Nixon.

Super-complaint from Which?

The regulator issued a response to a super-complaint from Which?, the UK-based consumer advocacy organisation, raising concerns about APPs. The consumer watchdog said there is not enough protection for people who are tricked into transferring money to a fraudster via an APP, which instructs their bank to send money.

Banks urged to do more

As part of its response to the super-complaint, the PSR, which is the economic regulator for the £75 trillion UK payment systems industry, has also launched a concerted and coordinated industry-wide effort to tackle payment scams. The initiative sets out the need for regulators and industry to commit to working together to better protect people from scams. The regulator stated that the data available on the scale and type of APP scams is “poor-quality and the ways in which banks currently work together in responding to reports of scams needs to improve”. Some banks could do more to identify potentially fraudulent incoming payments, and to prevent accounts falling under the influence of scammers, said the PSR.

Tackling the problem

With the aim of making it harder for criminals to carry out such scams and easier for people to recover money lost if they fall victim to such a scam, the PSR and Financial Fraud Action UK have agreed on the following goals:

• to develop a common understanding of what information can be shared under existing law and the key legal barriers to sharing further relevant information (for example, information that would help victims recover their money);
• to develop, collect and publish robust scam statistics, to address the lack of clear data on the scale and scope of the problem, and to enable monitoring of the issue over time; and
• to develop a common approach or best practice standards, that both the victim’s bank and the bank which receives the money should follow when responding to reports of scams. We would expect this to cover issues such as the availability of fraud specialists and processes for agreeing indemnity agreements between banks.

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CTMfile take: It's good to see the Payment Systems Regulator take this issue seriously and do something about it. Determination to tackle fraud with industry-wide initiatives and legislation are also needed in the corporate world.