Report highlights APP scam threat

31st October 2023

New figures released by the Payments Systems Regulator (PSR) has shown for the first time, the full extent of how well banks and other payment firms performed in tackling APP scams and how they treated those who fell victim in 2022.

The report showed that  TSB fully reimbursed 94% of the APP scam cases reported to it, followed by Nationwide which fully reimbursed 91% of cases and Barclays which fully reimbursed in 79% of cases. Whilst Only 6% of cases reported to Monzo were fully reimbursed, while Danske Bank fully reimbursed 7%, and AIB fully reimbursed 12%.

TSB reimbursed 91% of APP fraud losses to customers in 2022. Nationwide reimbursed 78% and HSBC reimbursed 73% of APP fraud losses. AIB Group reimbursed 10% of APP fraud losses. Danske Bank reimbursed 20% of APP fraud losses. Monzo reimbursed 22% of APP fraud losses.

The report also showed how much money customers at the 14 major UK banks lost to APP fraud for every million pounds they sent and how many APP fraud payments there were per million transactions sent with the top four firms with the highest sending fraud rate include TSB, Santander, Metro and Monzo.

For every £1 million TSB customers sent in 2022, £348 of that was lost to APP fraud. For Santander customers that is £322 per £1 million lost to APP fraud, and for both Metro and Monzo customers that is £280 per £1 million lost to APP fraud. In comparison, for every £1 million sent from customers of AIB Group, only £23 was lost to APP fraud.

For every 1 million transactions made in 2022 by Monzo customers, 141 were reported as APP fraud. For Starling and Metrobank customers, 127 transactions in every million were reported as APP fraud and for Santander, for every 1 million transactions made 117 were reported as APP scams. In contrast, for every 1 million transactions made by Danske Bank customers, only 39 were reported as fraud.

Chris Hemsley, Managing Director of the PSR said “This is the first time we can see at an individual level how well banks and payment firms are dealing with APP fraud. This represents a substantial improvement in transparency. This provides better information for customers on how firms handle APP fraud and encourages these firms to take more action to tackle it.”

“Our approach is working because we know there is a greater focus across many more firms on preventing fraud. Our commitment to transparency and the forthcoming mandatory rules are key to strengthening efforts to prevent these frauds from happening in the first place.”

“Over the coming months, we will be bringing all payment firms into new reimbursement arrangements to give more consistent protection across the board. This is important because we can see from today’s report that this has not always been the case.”