Are You Equipped to Tackle APP Fraud Scams?

What is an APP Scam?

Get ready to start hearing a lot more about APP (“Authorised Push Payment”) scams. APP is a type of fraud where someone is tricked into sending a payment to the account of a criminal. The UK government’s policy paper on APP last year said that these scams “have increased both in value and volume, with many individuals suffering significant financial and emotional harm” and UK Finance’s 2022 fraud report showed over £485 million lost to APP by both individuals and businesses.

The Payment Systems Regulator and the Financial Services industry have been working together to reimburse victims of APP for years now. In 2019 they introduced the Contingent Reimbursement Model Code, a voluntary scheme under which payment service providers voluntarily commit to reimbursing people after an APP scam. In theory, this covered around 90% of all affected transactions, but the government and the Payment Systems Regulator (PSR) agreed it wasn’t enough.

The New APP Rules

As of last week, we now know what the next stage of regulation around this issue looks like. The PSR has published a consultation on proposed new rules on reimbursing those who fall victim to these scams, which will be part of a package of changes which will also address reducing the number of APP cases through measures such as expanding the use of “Confirmation of Payee” checks.

The deadline for those rules coming into effect is now set for October 7th 2024, with a final revised set of rules to be published before the end of this year. From that date, the new rules will cover all transactions carried out using Faster Payments where the payer has either been misled about who they are transferring money to or misled about the purpose of the transfer – with exceptions for cases involving civil disputes, international payments and any payment made for unlawful purposes.

The provider of the victim’s payment services will be required to reimburse the person who has lost money within 5 days of the fraud being reported, and they will then seek to reclaim 50% of that cost from the payment provider of the fraudster.

Getting Rule-Change Ready

Organisations now have essentially one year to get everything in place to meet these new requirements. Failure to do so will incur financial penalties from the PSR, and there is also a substantial risk of an organisation’s reputation amongst customers being damaged if they’re seen as not dealing with fraud fairly and quickly.

Changes will need to be made to systems and policies, ensuring that the right result can be arrived at quickly if a customer is defrauded. APP is thought to be significantly underreported – something that’s likely to change if customers know a refund is guaranteed. The new rules will allow a customer to raise a claim as long as 13 months after the incident, so organisations should therefore expect to see a fairly immediate spike in these reports, which will need turning around in that tight 5-day deadline. It seems likely that we’re going to see very large-scale redress projects needed very swiftly once the rules are in effect.

Preparation and Prevention

Many businesses are already working to make APP scams harder to commit in the first place, but the new rules will definitely motivate more organisations to put time and resources into this. Investing in prevention will be crucial to reducing the overall number of APP fraud and in turn, lessening both the financial loss and the workload for remediation teams.

Payment providers will need to re-assess and re-think how they can build checks into the user interface for online banking and mobile apps, as well as informing customers about how this type of fraud is committed and giving people the tools to help them make legitimate transfers with confidence whilst spotting any potentially fraudulent requests.

How Can Kind Help?

So how can Kind Consultancy help you get ready? We work with a number of regulatory compliance experts who can help your organisation to create and implement the frameworks you need, including:

  • Creating and delivering training to both management and frontline staff
  • Policy and process review
  • Gap analysis
  • Enhancing your firm’s existing due diligence
  • Designing the new reimbursement framework

Every firm is different, and our industry-best subject-matter-experts in Kind Agile Solutions will tailor an approach that suits the specific size, scope and needs of your business.


Kind Agile Solutions is our interim talent service, built on a pre-screened bench of contractors who we know and trust to deliver exceptional work to our clients. This means we’re also uniquely positioned to assist with any volume resource needs relating to redress projects, with the ability to have skilled contractors with relevant experience on-site faster than any of our competitors.

We expect there to be a high demand for consultants working on APP fraud requirement readiness, so we recommend contacting us on 0121 643 2100 or soon for a confidential discussion about your needs.

[This article originally appeared on Kind Consultancy’s LinkedIn on October 2nd, 2023]

Get in touch