TechnoXander 151 Improving accountability and transparency against APP fraud

Transparency and accountability are key in banking and finance, and for consumer trust and consumer interests to be upheld. With this ever-changing landscape financial institutions must show how they are tackling Authorised Push Payment (APP) fraud and supporting victims – this new initiative does just that. By providing unprecedented insight into this it could be a game changer for a safer and more responsible financial industry.

For the first time, the UK’s largest banking groups are joining forces to share essential data regarding APP fraud. The information includes:

  1. Reimbursement to victims impacted by APP fraud
  2. Funds sent because of APP fraud
  3. Money received by payment firms due to APP fraud

Key Insights from the APP Fraud Performance Data Report:

This report shared by PSR provides key insights into APP fraud in the UK, such as challenges and inconsistencies associated with combatting this form of crime such as:

  1. Me-to-me transactions: Me-to-me transactions involve payments from victims under fraudster control to accounts in their names; however, these can be challenging to identify and trace back.
  2. Seller disputes: Distinguishing between actual purchases that never materialised and those which don’t match up can be challenging, leading to inconsistency between evaluations.
  3. Payments to crypto exchanges: Scams that involve payments to cryptocurrency exchanges can often leave victims unclear about when their funds were lost, leading to different outcomes from various PSPs and financial services providers.

Metrics A, B, and C provide a thorough picture of how different banks handle anti-payroll fraud cases – their strengths as well as areas requiring improvement – while providing insight into how banks address different challenges related to combatting APP fraud.

Here’s our take on the metrics: For instance, at TSB Bank we believe their initiative to enhance fraud investigation procedures and provide comprehensive training to their fraud operations team shows they’ve taken an effective stance against APP fraud.

Monzo Bank – Recognising the need to increase warning systems and deliver direct, clear messages through their Monzo app, they should take measures to improve customer awareness and prevent risky payments.

Clear Junction – They should commit to reviewing and enhancing KYC processes to bolster security and address account takeovers.

Dzing Finance – By implementing Confirmation of Payee (CoP), they can actively enhance their security measures to protect customers from APP fraud.

Metrobank – Acknowledging the complexities of APP fraud, they would likely be in the process of developing strategies to tackle this issue more effectively.

At TechnoXander, we specialise in providing a comprehensive Confirmation of Payee solution that is fully compliant and seamlessly integrable, empowering your customers and boosting their confidence. Connect with us to gain insights into the upcoming PSR regulations and discover how to fortify your customer deposits.

Recognising responsible banking:
In 2022, multiple financial institutions including TSB, Nationwide, HSBC, First Direct, Barclays, Santander NatWest, RBS, and Ulster Bank made significant strides toward customer protection by refunding over 60% of APP fraud losses – an excellent demonstration of responsible banking as they recognise the significance of safeguarding customers and making victims whole.

With the help of the Payment Systems Regulator (PSR), the Authorised Push Payment fraud report gives us the chance to see how different banks handle APP fraud. With data, we can make more informed decisions that benefit us financially.

Mandatory Requirement:
Looking ahead to October 2024, the biggest change to expect will be with the PSR’s mandatory reimbursement requirement. This will give consumers consistent protection so that if their identity is stolen in a future transaction, they have peace of mind.

Supporting the Battle Against Fraud:
In the ongoing war on fraud, the PSR plays an essential role in supporting UK payment firms. Additional interventions have been introduced to increase data sharing and detect and prevent scams more quickly and effectively. Furthermore, Confirmation of Payee offers significant protection to every transaction through name-checking services such as Confirmation of Payee; together these efforts demonstrate our shared dedication towards creating a safer financial landscape for us all.

APP fraud in the UK is complex with mixed responses and outcomes for victims. However, the industry is getting better at fraud prevention. Regulatory bodies have introduced the 2024 reimbursement requirement and Confirmation of Payee making it more consistent and accountable when dealing with APP fraud.

Engage in the conversation, stay informed, and join the fight against APP fraud. Together, we can create a safer and more secure financial landscape for all.

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