PSR reveals the UK banks enabling the most APP fraud

Ellie Duncan
02 Nov 2023

The UK’s Payment Systems Regulator (PSR) has published, for the first time, data showing the full extent of how well banks and other payment firms are tackling APP fraud and their treatment of those who fell victim to scams.

It has revealed that TSB, Santander, Metro Bank and Monzo are the top four firms with the highest sending fraud rate, which is the amount of money customers lost to APP fraud for every £1 million they sent and how many APP fraud payments there were per million transactions sent.

According to the PSR, for every £1 million TSB customers sent in 2022, £348 of that was lost to APP fraud, while for Santander customers £322 per £1 million was lost to APP fraud, and for both Metro and Monzo customers respectively, £280 per £1 million was lost to APP fraud.

By comparison, for every £1 million sent from customers of AIB Group, only £23 was lost to APP fraud.

For every one million transactions made in 2022 by Monzo customers, 141 were reported as APP fraud. At Starling and Metro Bank, 127 transactions in every million were reported as APP fraud by customers, and for Santander, for every one million transactions made, 117 were reported as APP scams.

At Danske Bank, by comparison, only 39 of every million transactions made was reported as fraud by customers.

The report also showed which banks and payment firms held accounts that received the highest value of APP fraud per £1 million of transactions and the highest number of APP fraud payments per million transactions received.

Those firms with the highest account receiving fraud rate, as identified by the PSR, are Metro Bank, Starling, TSB and Monzo.

For every £1 million received into Metro Bank accounts in 2022, £696 of it was APP fraud, while at TSB, for every £1 million received, £605 of it was APP fraud.

At Starling, the PSR reported it was £307 in every £1 million, and for every £1 million received at a Monzo account, £227 was from an APP fraud. In contrast, for every £1 million received by Santander accounts, only £44 was from APP fraud.

Chris Hemsley of the PSR and JROC co-chair

Chris Hemsley, managing director of the PSR said: “This is the first time we can see at an individual level how well banks and payment firms are dealing with APP fraud.

“This represents a substantial improvement in transparency. This provides better information for customers on how firms handle APP fraud and encourages these firms to take more action to tackle it.”

New measures announced by the PSR in June this year will see mandatory reimbursement requirements in place for victims of APP scams come into force in 2024.

“Our commitment to transparency and the forthcoming mandatory rules are key to strengthening efforts to prevent these frauds from happening in the first place,” added Hemsley.

“Over the coming months, we will be bringing all payment firms into new reimbursement arrangements to give more consistent protection across the board. This is important because we can see from today’s report that this has not always been the case.”

‘Inconsistent’ reimbursement

The PSR also found that there are “inconsistent outcomes” for customers who report an APP scam to their bank or building society.

It found that some banks and payment firms are automatically reimbursing in full, while others may only make a partial reimbursement leaving victims to bear part of the loss, and others will only accept claims “subject to very narrow circumstances”.

In its response to the PSR’s data, UK Finance said what it does not show is where fraud starts.

“Our data shows that 94% of authorised fraud starts online or over the phone, through social media, fake messages and more,” said UK Finance.

“But the technology and telecommunications sectors bear no responsibility for reimbursing victims, which means there is little commercial incentive for them to truly tackle the enormous threat that continues to proliferate on their platforms and networks. While you can reimburse money, you cannot reimburse the emotional and psychological impact that fraud has on victims.”