Soaring levels of authorised push payment (APP) fraud in the UK are diminishing consumer confidence in digital banking, as revealed by recent research from Visa.
APP fraud occurs when individuals are deceived into transferring money to fraudsters masquerading as legitimate payees. In the first half of 2023, total losses from APP scams surpassed £239 million, according to UK Finance, with one in three participants in Visa’s survey reporting that they have fallen victim to such fraud.
The survey, which included 2,000 UK internet users, found that while nearly 60% feel confident in managing their finances, experiencing an APP scam can significantly shift their money management behaviors. Almost a fifth (19%) of those who have been scammed noted a decrease in their confidence in digital banking, while more than a third (35%) reported a negative impact on their willingness to pay new payees.
New rules for APP fraud reimbursement will take effect in October, shifting the responsibility onto banks to enhance their fraud prevention measures.
Mandy Lamb, managing director of Visa UK & Ireland, stated, "Once fraud occurs, the money is in the hands of the criminals. The financial impact, along with the distress and inconvenience experienced by victims, leads to further consequences such as lost savings, income, and taxes, which can also support broader criminal activities. While reimbursement serves as an important safety net, our primary goal must be to prevent fraud, both within the financial services sector and beyond.”
Learn more about payments at NextGen Nordics on April 23, 2024.