Losses totalling £354m arising from Authorised Push Payment (APP) scams were recorded in 2018. This staggering number of losses represents a total of 83,864 victims, the majority of which were on personal accounts. To help reduce cases of APP scams and to minimise the impact the crime can have on consumers, a Voluntary Code and a Confirmation of Payee scheme are being introduced in the UK.

Scams are a huge problem and these statistics are more than just numbers. The victims of APP scams are your neighbours, your friends and your family members - real people dealing with life changing financial and emotional consequences. Of all the people who have experienced APP scams not everyone has been refunded.

In February, the APP Scams Voluntary Code was agreed following work between industry, consumer groups and the Payment System Regulator. The code, which will come into effect from 28 May 2019, aims to better protect customers and reduce the occurrence of APP scams. On the same date, the first group of signatory Payment Service Providers will also be announced.

For me, one of the most interesting factors set out by the APP Scams Steering Group is recognising that all customers can be vulnerable, and that vulnerability is dynamic. According to the Voluntary Code, one of the areas considered when assessing a victim’s vulnerability is their capacity to protect themselves, which includes their knowledge, skills and capability in engaging with financial services and systems.

But what does this actually mean? Speaking with my friends I was struck that they seem to be under the impression that it is “easy” to be refunded a sum of money if sent to the wrong UK account. “The bank must know who the money was sent to”, one of my friends said. Is this a normal perception among banking customers, and if so, what impact does this have on the number of scams? Would a customer with this perception be considered a vulnerable customer under the new Voluntary Code?

What is clear is that while industry initiatives are important to protect consumers and businesses, education across the full customer spectrum is a never-ending process to reduce cases of APP scams.

Confirmation of Payee helps make APP scams much more difficult, especially in cases where a customer has been duped into using new account details (that they think belong to their window cleaner, solicitor etc but is actually an account in control of a fraudster). Fraud is bad for society and should not be acceptable at any level. Confirmation of Payee provides new tools to protect customers.

Make sure you are ready for the new Confirmation of Payee rules.