Chris Hemsley speech for Counter Fraud Conference on mitigating public sector fraud – 23 February 2022


Chris Hemsley Speech APP scams

This is the text of the speech as drafted and may differ from the delivered version. This speech was delivered by our Managing Director, Chris Hemsley, at the Counter Fraud Conference 2022, providing thoughts on APP scams.

Good afternoon. I’m Chris Hemsley, Managing Director of the Payment Systems Regulator (PSR). We are the independent economic regulator of the systems that sit behind most of the ways that people and businesses make and receive payments – be it by cash, card or bank transfer.

And today, I’d like to talk to you about whether prevention is better than cure.

If my research serves me right, Erasmus was the first philosopher to pen the phrase.

Today, this principle is most attributed to health care, but it is also a phrase that gets used in the context of fraud and, in particular the subject I would like to discuss with you now – Authorised Push Payment scams, also known as APP scams.

All of us here will be able to talk about a scam example, whether it’s a personal experience or through someone you know. It’s a significant and growing problem.

Every year thousands of people are tricked into sending money to fraudsters in APP scams. These types of scams rely on deception and psychological manipulation so that the victim sends the money to the fraudster.

In payments speak: the transaction is authorised.

These scams can cause significant harm to victims, with many losing life-changing amounts of money. The number and cost of these scams is increasing, along with fraudster’s sophistication and persistence.

And even if these victims are reimbursed – there is still harm. The victims feel shame, embarrassment, and the worry over whether they will get their money back. And, when they do, it comes at a cost to banks, which ultimately has to be paid for.

For all of these reasons, APP scams are a very significant problem. And they are a problem that is getting bigger. Industry published[1] data shows that in the first half of 2021, APP fraud increased by 71% to around £355m – that’s larger than card fraud.

And in the same period in 2021, it affected over 100,000 people.

At times the debate around APP scams is framed around a question of who is to blame?

This is an easy question to ask and answer – It’s the criminals.

But a more useful question is how do we prevent these harm