A new report from the Payment Systems Regulator (PSR) reveals how fraudsters exploit major platforms, such as social media and online marketplaces, to scam consumers, leading to significant financial and emotional harm.

In 2023 alone, APP (Authorised Push Payment) scams cost UK consumers £341 million. Victims are not only losing money but also trust in the platforms fraudsters use to contact them. Notably, 41% of victims reported a loss of trust in social media companies—a figure four times higher than those who lost trust in traditional banks.

The PSR emphasizes that while new reimbursement rules aim to motivate banks to prevent fraud, social media, telecoms, and online marketplaces must also address the ways fraudsters exploit their systems. To tackle this, the regulator is calling for greater collaboration and data sharing between payment firms, technology platforms, and other industries to close the vulnerabilities fraudsters rely on.

Kate Fitzgerald, PSR’s head of policy, explains:

“Our report highlights how major platforms are being exploited by fraudsters to deceive victims, often with devastating effects. By publishing this data, we want to drive real change across industries, tackling the root causes of APP scams. Preventing scams before they happen is the best way to protect consumers and reduce harm.”

Evolving Tactics
NatWest has already observed shifts in fraud tactics since the implementation of new APP reimbursement rules. Nick Perkins, NatWest's director of fraud prevention, notes:

“We can see a shift from high-value stuff to volume [fraud] and we are seeing a lot of displacement into cards. Every time you plug one set of gaps, you find some new ones.”

Similarly, Claire Simpson, senior policy manager at PSR, acknowledges an unintended consequence of APP regulation: a rise in fraud across other payment channels. However, she emphasizes that while this shift is anticipated, the PSR remains focused on addressing fraud across all payment systems.

The Path Forward
The PSR believes that stopping scams earlier in their lifecycle requires industry-wide collaboration and robust data sharing. Perkins underscores that while APP regulation is a progressive step, it marks just the beginning of a longer journey to effectively combat fraud.

By addressing vulnerabilities across platforms and fostering cross-industry partnerships, the PSR aims to create a unified approach to safeguarding consumers and restoring trust.