Fewer victims, more money returned and firms stepping up to tackle and prevent fraud. These are some of the findings from Frontier Economics’ independent review, which confirms that the Authorised Push Payment (APP) reimbursement policy is having a positive impact – with in-scope losses falling significantly since its introduction.

Frontier found that APP fraud losses have fallen by an estimated £73 million per year and the number of APP scams have fallen by nearly 35,000 due to the policy. Reimbursement rates for all claims have risen from 54% to 65%, and for claims in-scope of the policy, firms are now reimbursing 97%. The biggest improvements have been seen by firms that had the highest APP fraud levels before the policy came into force – a clear sign the incentives are working as intended.

Frontier estimate that, even after accounting for increased costs to PSPs, the policy is delivering a positive short term net benefit of £17m–£29m, which they consider a conservative assessment of its overall impact.

David Geale, managing director of the Payment Systems Regulator said:

”The evidence is clear –APP reimbursement is working. Payment fraud losses are down, more victims are being reimbursed, and firms are investing in prevention.

“But we are not complacent. There is more to be done to ensure consistency in how consumers are treated, along with a step-change in the approach taken by tech firms and telcos to keep up with, if not outpace, those criminals exploiting their systems.”

There is no evidence of market exits or reckless consumer behaviour, which some had predicted would be a consequence of the policy. 

Inconsistent implementation has meant outcomes can still vary to some degree depending on who consumers bank with. The PSR is stepping in to fix this with a roadmap setting out its next steps. A consultation, launching before the end of the year, will include proposals to improve consistency in the application of the policy. Where the PSR has identified poor compliance, it has and will continue to intervene with firms.

Fraud remains an evolving global challenge. Whilst the PSR’s policy is delivering positive outcomes, criminals are adapting. It is important that everyone plays their part in tackling it – including tech firms and telcos. The PSR will publish new data at the end of the year showing which platforms fraudsters are using to target victims and work closely with partners to drive a coordinated response to tackle fraud at its source. 
 
Notes to editors:

  • The Frontier Economics evaluation report is available here.
  • The APP scams policy roadmap is available here.
  • Frontier Economics’ analysis is based on the date of the scam transaction, while UK Finance data is based on the date the claim is closed by the PSP. The PSR APP reimbursement dashboard reflects claims closed in the reporting period, excluding transactions before 7 October 2024 and those out of scope (e.g. international payments and business transactions). The UK Finance data covers all APP fraud losses, not just those within scope of the APP reimbursement policy.