Soaring levels of authorised push payments fraud in the UK are turning consumers off digital banking, according to research conducted by Visa
APP fraud occurs when someone is tricked into transferring money to a fraudster posing as a genuine payee. Total losses due to APP scams exceeded £239 million in the first half of 2023 according to UK Finance, and one-in-three of those surveyed by Visa reported having fallen victim to APP fraud.
The research conducted among 2000 UK internet users found that whilst nearly three fifths are confident in managing their finances, falling victim to an APP scam can change money management habits. Almost a fifth (19%) of those surveyed that have fallen victim to an APP scam say that the scam has decreased their confidence in digital banking, and more than a third (35%) say it had a negative impact on their openness to paying new payees.
Under new APP fraud reimbursement rules set to come into force in October, the onus will be placed on banks to more effectively combat fraud.
Mandy Lamb, managing director, Visa UK & Ireland, says: "Once fraud happens, the money is in the hands of the criminals. As well as the financial impact, distress, and inconvenience this causes to victims, there are knock-on effects in terms of lost savings, income and taxes, as well as funding wider criminal activity. Reimbursement is an important backstop, but fraud prevention must be our collective goal, in the financial services industry and beyond.”
Learn more about payments at NextGen Nordics on the 23 April 2024.