Authorised Push Payment Scams cost the UK at least £485.2 million in 2022.
In their 2022 Annual Fraud Report, UK Finance, a trade association for UK banking and financial services reported that Authorised Push Payment (APP) scams make up about 40% of the 2,988,705 cases of confirmed fraud in 2022, and that the total losses were £485.2 million.
However, Dr. Oliver Prill, the CEO of Tide, a provider of Business Accounts for small to medium sized businesses, stated recently that the actual figure could be between “a billion and one and a half billion” when considering all the cases of unreported fraud.
What is an APP scam?
An APP scam is a form of fraud that occurs when a fraudster poses as a genuine, legitimate payee and tricks a victim into sending them money. Fraudsters employ various social engineering and impersonation tactics to manipulate their victims into willingly transferring money to fraudulent accounts.
Examples of APP scams
APP scams take many forms, and it is important to recognise them. Here are some examples of the most common APP scams:
- Romance Scams – fraudsters use fake profiles to convince victims into believing they are in a romantic relationship before tricking them into sending money into a fraudulent account. UK Finance reported that £31.3 million was lost to romance scams in 2022.
- Impersonation Scams – There are two types of impersonation scam. The first is where fraudsters pretend to be the Police, the victim’s bank, a utility company, or even a government department and trick victims into sending money to a fraudulent account by claiming that the victims must settle a fine, or that there has been fraudulent activity in their accounts. The second is where fraudsters pretend to be the victim’s friend or family member using a fake phone number or social media profile, and then make up a story to convince the victim to make a bank transfer. UK Finance reported nearly £178 million was lost in 2022 because of impersonation scams.
- Investment Scams – fraudsters prey on the greed of their victims and convince them to move money to a fund or an investment that doesn’t exist, promising the victims a high return for their money. According to UK Finance, £114.1 million was lost because of investment scams in 2022.
Other examples of Authorized Push Payment Scams (APP scams) include purchase scams (the victim pays in advance for goods or services that are never received), advance fee scams (the fraudster convinces the victim to pay a fee as a deposit for the release of a larger payment), invoice and mandate scams (victims try to pay a legitimate invoice but the fraudster convinces them to redirect the payment to a fraudulent account), and CEO scams (the fraudster impersonates the CEO of the victim’s organisation and convinces the victim to make an urgent payment to a fraudulent account).
How to stay safe
- Be suspicious – Always consider the possibility of a scam. If a price or a return looks too good to be true, it most likely is.
- Verify – question it to the highest level. Contact your friend, family member, organisation, or bank to confirm whether a request is legitimate.
- Don’t rush – a genuine organisation will never rush you into making a payment straight away.
- Report – you can report cases of fraud to your bank, to the police, or submit a report to Action Fraud, Citizens Advice, the Financial Conduct Authority, or an independent charity.
UK Government Fraud Strategy
On 3 May 2023, the UK Government unveiled a new strategy to fight back against fraud. The new measures include implementing a National Fraud Squad, which is made up of 400 specialist investigators, and make greater use of the UK’s intelligence community. The government also aims to increase working with international partners with the aim to disrupt and prevent fraud overseas. It was also revealed that £30 million would be invested into a new reporting centre to make it easier for victims to report cases of fraud. On 7 June 2023, it was also announced that banks will be required to reimburse fraud victims.
Fraud is any behaviour by which a person intends to gain a dishonest advantage over another. Corporate fraud refers to cases in which a company or organisation has been a victim of internal or external fraud. The detection of corporate fraud usually arises from an internal audit finding, anonymous tip off, suspicion, complaint, whistle-blower or allegation. In our experience, suspicions of fraud are normally well founded, irrespective of the source.
If a suspicion of corporate fraud has arisen we trust our clients’ instincts and consult with them to develop the next course of action. We help them analyse the evidence and circumstances surrounding the suspicion and set out clear objectives in an investigation plan.
Whatever the investigation, each fraud case must begin with the intention and preparation that it could end in litigation.
At TenIntelligence we take fraud very seriously [see how TenIntelligence can help with corporate fraud investigation]. If you think you have been the victim of an APP scam or any other type of fraud affecting your personal accounts, we recommend you contact your bank and the Police immediately. In addition, Action Fraud is an online portal which you can also report fraud and can be found at actionfraud.police.uk.
If you have any further questions or would like to talk to us about a fraud you have experienced or would like to enhance your anti-fraud measures, please contact us at firstname.lastname@example.org.
Rachael Legg – Senior Analyst at TenIntelligence