Authorised Push Payment Fraud

Category: Dispute Resolution

Authorised Push Payment Fraud: What is it?

There have been increasing numbers of clients coming to me asking for help where they or their customers have been the victim of an authorised push payment fraud (“APPF”).  Typically, APPF is a misdirect by the fraudster where a party is tricked into paying funds into the fraudsters account rather than where they intended to send the money.

 

Historically, the banks have been reluctant to pay any compensation because they argue that they have been carrying out the instructions of their customers. However, customer groups, including Which? point out that the banks have not, historically, verified all transactions by checking that the name on the account match, even where the account numbers do.  In 2017 there were over 43,000 cases of APP Fraud which cost customers around £236 Million and all indications are that this number continues to rise. As a result of a super-complaint initiated by Which? relating to concerns that there were not adequate protections for victims of this type of scam, and the FCA and Payment Systems Regulator investigated. This has resulted in there now being a mechanisms for victims of this type of fraud to complain to their bank and if the complaint is not resolved satisfactorily that the matter can now be referred to the Financial Services Ombudsman for investigation.

 

Earlier this month, TSB launched its pledge to refund its customers who are the victims of fraud (up to £1 Million), if that fraud occurred after 14 April 2019. We will watch closely to see if other banks follow.

 

How to protect yourself

Being aware that this could (and does) happen to businesses and individuals alike, should forearm you and recognising the tell tell signs of what could be potentially be a fraud of this kind is key. Things to be aware of include:

  1. Making sure that you have a process in place if you are a business, so that you can verify bank details; and that accounts staff can be on notice if a supplier changes its bank details.
  2. As an individual, even if a person calls you with personal information, this doesn’t mean they are genuine. Banks and the police will never ask you for your pin  or password, or ask you to transfer money to a ‘safe account’
  3. Don’t be afraid to question calls you receive in which you are asked  for personal details. Instead, say you will call the company back (and use a trusted number rather than call-back to make that call.
  4. Don’t click on links in unsolicited emails and texts.

 

What to do if it happens to you

It can happen to anyone, but there are a number of things you can do if it happens to you:

 

  1. If you are the Payer:
    1. complain to your bank.
    2. If you are not satisfied with the bank’s response, new rules allow you to complain to the FCA
    3. Put a payment confirmation system in place with your accounts team
  2. If you are the Payee:
    1. you can sue the Paying party for unpaid debt.

 

Can we help?

Our experienced team would be happy to help with any queries which you may have and would be happy to discuss how we can help you in recovering money lost as a result of fraud.

Give us a call on 01752 827012 or email Ellen Yeates at [email protected]