Authorised Push Payment (APP) fraud has spread like wildfire in the UK. According to UK Finance, APP fraud increased from £208 million in the initial months of 2020 to £355 million in 2021. The trend followed in the second half of 2021, with APP fraud reaching £819 million. This growth in APP scams is staggering and can cause paramount harm to customers.
APP scams occur when an individual authorises their respective Payment Service Provider (PSP) to transfer money to an intended payee’s account. In an APP scam, the payer is duped into making a push payment into an account held by a fraudster.
What’s more, there were approximately 189,000 reported APP scams in 2021 on personal accounts. It is a surge of 30% from 2020. According to UK Finance, the UK banks reimbursed £207 million from the total £479 million of APP fraud, amounting to 43% of the refund. These scams force customers to suffer emotionally and financially; banks also suffer heavy financial and reputational losses.
Fathoming the continuing challenge, the payment processes must be secure; thus, PSPs must take stringent measures to stop APP scams. Banks have verified that data can now be shared with safety through Confirmation of Payee (CoP) using Open Banking rails. CoP is known for fraud prevention, reducing losses and enhancing a bank’s repertoire as a reliable, trustworthy, and safe guardian of customers’ money.
Yes, CoP is in direct combat against APP scammers.
The top ten banks and 49 other banks have built barriers to protect data from breaches; the fraudsters have now shifted their focus to small banks. Fathoming this constant struggle between the banks and scammers, Technoxander’s CoP (Confirmation of Payee) service assists banks and financial institutions in conducting smart name checking. This step assures UK payers that the payment is paid to the correct recipient.
Technoxander’s CoP service delivers efficient services to banks and provides an additional layer of security. The real-time service and quick checking of the payee’s name (with Sort Code and Account Number) matching the account holder’s name at the payee bank is a seamless process when using Technoxander’s CoP.
The above services are built for banks and building societies. The solution is compliant with Pay.UK requirements and can be easily used as a Native solution or SaaS.
It can be noted that with the rise of APP fraud in the finance industry within the UK, CoP has reduced the attack on money drastically. Here, Technoxander is making a mark by helping banks save customers’ money from scammers throughout the UK.
To learn more about the world of CoP and how it prevents APP fraud, please get in touch with the Technoxander team for a no-obligations chat.
