At Modulr, keeping our customers safe from fraud remains our top priority.
As part of our involvement with initiative such as Take Five to Stop Fraud, we’ve outlined the common types of Authorised Push Payment (APP) fraud, helping you, your business and employees, and your customers stay educated and protected from financial fraud.
Read more about the industry initiatives Modulr are supporting to enable better fraud detection and prevention here.
To contact Modulr if you’ve been a victim of fraud, please call our 24/7 support team on 159 (or dial +44 (0) 303 313 0060), alternatively complete this form.
What is Authorised Push Payment (APP) fraud?
APP fraud occurs when criminals deceive individuals into sending money from their account into an account controlled by the criminal. The latest figures show that £239.3 million was lost to APP scams in the first half of 2023 [UK Finance]. In response, the Payment Systems Regulator (PSR) is introducing customer protection measures against APP fraud starting from 07 October 2024. There will now be a maximum reimbursement level of £415,000 per claim for consumers who fall victim to this type of fraud.
Common Types of APP FraudLearn about how you can remain vigilant and secure against the latest scams.
Purchase Scams
Purchase scams involve paying in advance for goods that are never received. Criminals often create fake websites and documents that appear genuine to trick victims. Purchase scams include, paying for items on an online marketplace that do not exist or booking a service like a hotel from a website but finding the reservation email was fake. In 2023, UK consumers lost a record £85.9 million to purchase scams, accounting for 67% of all APP fraud cases.
These scams typically occur through social media, online auctions, or e-commerce sites. Often the buyer is convinced to pay via a bank transfer rather than using card payments – this means they can’t request a chargeback as easily and it is easy for the criminal to quickly disappears with the money.
How to Stay Safe:
Impersonation Scams
Impersonation scams occur when fraudsters pose as someone you know and trust, convincing you to make a payment or provide financial details. Gen Z are particularly vulnerable to impersonation scams, with almost half of 18-24-year-olds targeted and over half sharing personal information [Take Five].
How to Stay Safe:
For more information on how to stay safe from other impersonation scams please read: UK Finance 2023 Half Year Fraud Report.
Advance Fee Scams
Advance fee scams involve being convinced to pay an upfront fee for high-value goods or loans that never materialise. These scams were the second most common form of APP fraud in the first half of 2023, with £15.1 million lost.
How to Stay Safe:
Romance Scams
Romance scams involve being tricked into sending money to someone who has adopted a fake online identity to form a relationship. In the first half of 2023, £18.5 million was lost to romance scams, a 26% increase from the same period in 2022.
Romance scams are particularly cruel and can last for a long time while a scammer attempts to gain a closeness with their victim. It can be hard for someone who is the victim of a romance scam to recognise it.
How to Stay Safe:
Investment Scams
Investment scams involve persuading individuals to transfer substantial sums of money, expecting high returns, only to lose their investments. These scams account for nearly a quarter of all APP fraud losses, amounting to £57.2 million in the first half of 2023.
How to Stay Safe:
If you think you’ve been a victim of fraud, contact your bank immediately. The quicker fraud is reported the better.
To contact Modulr if you’ve been a victim of fraud, please call our 24/7 support team on 159 (or dial +44 (0) 303 313 0060), alternatively complete this form.
Helpful links:
Action Fraud: www.actionfraud.police.uk/
Citizens Advice: www.citizensadvice.org.uk/consumer/scams/get-help-with-online-scams/
Victims Support: www.victimsupport.org.uk/crime-info/types-crime/fraud/