UK Finance has called for cross-sector collaboration to stop authorised push payment (APP) scams, after announcing a change to the process of reimbursing ‘no blame’ cases under the voluntary industry code.

The new simplified process will enable signatory banks to individually pay back cases rather than through a shared central pot.

APP scams occur when people are tricked into authorising a payment to an account that they believe belongs to a legitimate payee, but is in fact controlled by a criminal.

In ‘no blame’ cases, both the customer and the bank will do everything expected of them under the code, but the criminal is still able to carry out the fraud. Criminals do this by bypassing both banking security systems and customers’ due diligence by exploiting vulnerabilities outside the control of the financial sector – such as fake investment adverts on online platforms.

APP ‘no blame’ scam cases were previously funded through an interim arrangement, where seven banks and building societies provided funding into a central ‘no blame’ pot – with the signatory banks directly refunding customers in such cases, and then claiming it back from the pot. 

Effective today, the new process will mean individual banks oversee the end-to-end reimbursement process for APP scams, which UK Finance suggested will reaffirm the industry’s commitment to a fair outcome for victims of ‘no blame’ cases.

The new framework only applies to the financial institutions which have signed up to the APP voluntary code and their customers.

UK Finance managing director of economic crime, Katy Worobec, commented: “The interim funding pot was originally set up because we had asked that government and regulators work with industry to find a long-term solution to funding of ‘no blame’ cases, involving other sectors like online platforms, which are used by criminals to perpetrate the fraud, contributing to reimbursing the customer. Sadly, that is yet to happen.”

Head of unit at the Dedicated Card and Payment Crime Unit (DCPCU), Detective Chief Inspector Gary Robinson, added: “We would welcome opportunities to partner more closely with the online platforms. Recent collaborations with social media and telecommunications companies enabled the DCPCU to successfully take down 731 social media accounts linked to fraudulent activity, of which 258 were involved in recruiting money mules.

“Everyone should play their part in helping tackle fraud, including members of the public who are reminded to protect themselves by taking a moment to stop and think before parting with their money or information. Contact your bank immediately if you think you’ve fallen for a scam.”

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