The PSR also detailed the technical process that banks and building societies will have to follow as part of this new reporting requirement. According to PSR, there were over 95,000 incidents of APP scams in the UK in the first half of 2022, with losses amounting to GBP 250 million.
In order to make sure that banks and building societies are protecting UK citizens, the PSR has issued a measures package, and this most recent consultation focuses on the technical process for the collection of scam data that will reveal for the first time how well companies are protecting their customers.
Banks and building societies will be required to provide data regarding the proportion of victims who are left fully or partially out of pocket, as well as the rates of APP scams happening at both sending and receiving entities. By publishing this data, clients will have a clearer picture of how well their bank performs when it comes to tackling scams and reimbursing victims.
PSR representatives emphasised the importance of transparency, especially when it relates to the way banks treat people who have fallen victim to APP scams. They also revealed that publishing this information will encourage banks and building societies to do more to help people.
The consultation is scheduled to complete on 17 January 2023, and the regulator will eventually release a policy statement, as well as a direction and scam data publication template with information about when the published reporting will start.
As part of The Paypers Financial Crime and Fraud Report 2022, Arun Chauhan, Director of Tenet Compliance, talked about some of the measures banks could take to reduce the occurrence and effects of APP fraud on their customers.
APP (authorised push payment) fraud happens when someone is tricked into sending money to a fraudster posing as a genuine payee. There are numerous ways a fraudster would be able to pull this off, for example through intercepting emails, posing as a genuine business, sending links to fake websites via email or text messages, and cold calling.
According to a report by UK Finance, APP fraud has, for the first time, surpassed card fraud by incurring losses of GBP 355 million in the first half of 2021. The increase in online transactions fuelled by the COVID pandemic has exacerbated the problem, providing more opportunities for COVID-related fraud.
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