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Scamdemic – forecasting the future cost of authorised push payment (APP) fraud

According to UK Finance, there was a 71% increase in APP fraud in the first six months of this year, reaching £355m(1). The question is what does the future of costs look like. Let’s take a look at the latest results:  

Before making a forecast let’s reveal what has changed in the six months up to December 31st from the first six months of the year:   

  1. There has been improvement on some social media sites as the site owners have asked the companies offering investments to show proof they are FCA registered before showing the paid for advert
  2. Some banks have banned crypto currency activities and upon opening new bank accounts crypto currencies is on the agenda
  3. The Payment Services Regulator plans to take a firmer stand on encouraging banks to use Conformation of Payee (CoP), reviewing and possibly mandating the voluntary reimbursement model and perhaps publishing the banks individual performance in the existing model. Any implementations are expected to commence next year
  4. A number of banks are now texting faster payment transactions to the account holders mobile phones as the money leaves the account 
  5. The Ombudsman Service received 50,906 complaints about financial businesses in the first three months of the financial year. Over that period, 60% of fraud and scam complaints were upheld by the organisation, compared with 50% the previous year. For the first time in over a decade, current accounts were the most complained about product. Banks and other financial institutions need to do more to resolve complaints from their customers fairly(2)

At this stage the same regulatory environment remains in force for the whole of 2021 along with banks’ approach to the defrauded customers forcing many to seek help from the Ombudsman. Going forward into 2022, there maybe more changes to prevent APP fraud, which could be enacted by the regulators.

As baseball’s Yogi Berra noted: “It’s tough to make predictions, especially about the future”. A prediction of the amount of defrauding in H2 2021 and in going forward it is vital to grasp the scale of AAP fraud.  The UK Finance official fraud figures are realised usually 90 days the half-year closes. By having a prediction the accuracy behind the figures can be assessed and modified to what has actually occurred.  Actions can then be quickly taken to stop APP fraud.

APP fraud through the first half of 2021 was running at £60 million per month or £2 million a day a running rate of £710 million a year. Jumping up from H1 2019 with a running rate of £416 million. Should this continue at the same rate by H1 2023, the annual run rate could be over £1 billion per year.

Dick Turpin is probably the most famous UK Highwayman robbing stagecoaches around York in the 1730s. The Victorians romanticised Turpin’s activities and before COVID, a local phrase, ‘at least Dick Turpin wore a mask’ was used when someone was committing daylight robbery. Today fraudsters do not need masks as they are largely invisible thanks to the Internet, advancing covert technology and an understanding of trust psychology but they do need a bank account to take your money.








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John Bertrand

John Bertrand


Tec 8 Limited

Member since

03 Apr 2020



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