The PSR (Payment Systems Regulator – which regulates payment systems in the UK) has published its first report on APP (Authorised Push Payment) scams. The report makes for some interesting reading and also highlights the scale of the problems faced by industry, and customers/users of payment systems (which is, essentially, everyone).
The report is based on the performance of payment firms (primarily, banks) and how they have responded to APP scam issues in 2022 (with the existing regulatory regime at that time). Changes to the requirements placed on payment firms are afoot, and the landscape will continue to change as rapidly as the systems and scams evolve.
We have recently seen several clients affected by some of the issues referred to in this report – and some similar ones, such as chargeback frauds (customers reclaiming payments made by fraudulent means, where the vendor could be liable), invoice ‘hijacking’ (invoices intercepted by a fraudster so that payment goes to them) and shell company fraud (using an incorporated company to claim payments without merit).
To help avoid falling victim to any of these issues, it is wise to become aware of how fraudsters can use a variety of different methods to carry out an attack – and ensure staff who handle payments are briefed on these, stay alert for any unusual activity, have an awareness of bank’s terms and conditions (and perhaps, their record of dealing with fraudulent payment issues – as shown by the report), and consider the terms of any insurance policies that may help ensure protection if the worst happens.
If you require advice on fraud and scams please get in touch with our commercial disputes team.