Authorised push payment frauds: the best and worst banks for scam refunds

Your chances of getting money back if you’ve suffered an APP scam can vary massively depending on your bank.

Authorised push payment (APP) scams are a big problem.

Recent data from UK Finance revealed that a whopping £239 million was lost to such frauds in the first half of the year, while the number of cases has jumped by a painful 22%.

It’s not just the scams themselves that are the issue though, but the way we are then treated by banks when reporting the scam.

It means that there can be huge variances in how likely you are to get your money back.

And a new report from regulators has highlighted the banks most and least likely to offer refunds when customers are scammed.

What is an APP scam?

As the name suggests, an authorised push payment (APP) scam is where the victim is conned into giving the go-ahead for a payment to take place.

This isn’t a scammer getting hold of your personal details, or gaining access to your bank account.

Instead, they manage to convince you to transfer money for what you believe are legitimate reasons.

These scams can come in all sorts of different forms, but essentially rely on the scammer posing as a legitimate business or organisation or business, ranging from the taxman and your bank to online retailers. 

And once the payment or money transfer has taken place, they disappear with the cash.

Getting your money back from APP scams

APP scams have been a contentious topic, because they aren’t subject to the same sorts of protections that unauthorised payments are.

Instead, we have had the industry itself come together to agree the Contingent Reimbursement Model (CRM) code, a voluntary code which means that signatories agree to refund customers when they are scammed.

There are obvious problems here, not only in the fact that it’s voluntary but also the way that different banks have been able to interpret the rules.

As we have highlighted in the past, certain banks have been accused of essentially victim blaming in the way they handle these cases.

Because of these difficulties, new rules around refunds are being implemented which should make it easier for people to get their money back when they have been scammed. 

These rules include clearer guidance for banks, effectively removing the room for interpretation that is currently the case, as well as pushing banks to provide those refunds more quickly.

The banks most likely to refund APP scam victims

The new report from the Payment Systems Regulator (PSR) is the first time we have had a proper breakdown of how different banks are performing when it comes to refunding customers who are caught out by APP scams.

Let’s take a look at how the different banking groups compare on those refunds.

According to the report, TSB has been unable to separate out reimbursements it has paid out to those who have taken complaints to the Financial Ombudsman Service (FOS), so its figure is “overstated”. 

That said, the PSR suggested this data issue is “not likely to have any material effect on its ranking”, effectively reinforcing the idea that TSB is the most likely bank to refund customers who are caught out by scammers.

Beyond that, the disparity in repayment rates is little short of staggering.

There are some banks which are refunding clients in the vast majority of cases, and others where the bulk of customers are held responsible for the scam occurring, leaving them out of pocket.

The banks most likely to be targeted by scammers

The report from the PSR also pinpoints the banks where customers are most likely to have been caught out by APP scams.

It worked this out by calculating how many APP fraud payments were sent per million transactions at each of the big banking names.

Here’s how the data breakdown looks:

It’s also interesting that even though they top this particular table, Monzo and Starling are towards the bottom of the list when it comes to refunding customers caught out by scams.

Banks must do better

APP scams are going to continue to be a big issue, with scammers becoming ever more sophisticated in the way they attempt to con us.

It seems the current protections are not up to scratch, given how differently victims are treated by different banks.

It’s therefore welcome that clearer protections are being introduced, but ultimately only time will tell whether they are sufficient.