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Payment fraud is rising as criminals devise increasingly cunning ways to deceive consumers. In the past year, fraud complaints surged as much as 40 percent.

One of the fastest growing types of fraud is Authorised Push Payment (APP) scams. These use emails to trick victims into making payments voluntarily. Members of UK Finance reported a huge 84,624 incidents of APP fraud last year, totalling £354.3 million in gross losses. The impact on victims can be devastating. Here’s how to prevent it from happening.

Type of Email Fraud

APP criminals monitor email threads and target victims specifically when they’re already expecting to receive a payment request from a legitimate organisation. The fraudsters send a message impersonating the legitimate company and requesting the victim make a payment. Emails can include invoices, but with bank details tweaked to that of the criminals account.

Another common approach is phishing emails. These lure victims into parting with their personal details which are then used by criminals to steal money. Similar to APP, the fraudsters often impersonate a legitimate source, such as your bank, HM Revenue and Customs and large organisations such as Amazon or PayPal.

What to Look Out For

Fraudulent emails can be tricky to spot. Here are some general rules to follow:

  • Approach any emails regarding payments with caution.
  • Before making a payment, verify the details with a company over the phone or in person, particularly if they’ve sent you an email with a change in their details.
  • Carefully check email addresses. Tell-tale signs of a fraudulent email include random letters, numbers or deliberate spelling mistakes.
  • Never click links or open attachments without checking the sender’s email address.
  • Exercise additional caution during times when you’re expecting a payment request, such as when you’re buying a house or paying an invoice.

How the Industry is Helping

Victims can’t always be reimbursed. In fact, where payments are authorised, such as with an APP scam, current legislation gives no legal protection to cover the losses. Thankfully, the financial industry is stepping in with tighter measures to prevent fraud and protect victims.

  • APP Scams Voluntary Code

This came into effect on May 28th to encourage payment service providers, including banks, to implement greater protection and reimbursement measures for fraud victims.

  • Complaints

If you fall victim to a scam you can now complain to both your bank as well as the bank receiving the fraudulent funds.

  • Confirmation of Payee

A system due to take effect next year, whereby anyone making a payment will be alerted if the account holder’s name doesn’t match the account.

We help organisations to be financially savvy by collecting recurring payments by Direct Debit. If you want to find out more about how we can help, Contact Us

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