The true scale of Authorised Push Payment (APP) scams remains unreported, with 63% of victims being self-identified, according to new research by Visa.
The survey conducted by Visa and Mintel among 2,000 UK consumers found that, in the majority of cases, it is the victim (63%), or their friend or family member (9%) who realises an APP scam has occurred, while in 25% of cases the scam is identified by the bank.
The 25% of scams discovered by victims’ banks are automatically captured and included in industry reporting figures, with the remaining 75% left to report the crime themselves.
However, the research revealed that some self-identified victims do not report the scam to their bank, meaning that 34% of all scams go unknown to banks. Moreover, 19% of all APP scams remain completely unreported to any authority.
The way the APP scam is handled by a victim’s bank also affects the relationship between customer and bank, even if they are reimbursed.
Of the APP scam victims surveyed by Visa, 15% said they left their bank as a direct result of an APP scam.
Just over half (51%) of victims acknowledged that trust in their bank was affected because of the APP scam.
While Visa found that 58% of UK consumers are confident in managing their finances, those who had been targeted by a scam reported a loss of confidence in money management, and grew particularly sceptical of online payments to the extent they turned away from online channels.
The research found that 35% of victims said it had a negative impact on their “openness” to paying new payees, while 19% said it had eroded their confidence in digital banking.
The majority, at 52%, of current account holders surveyed believe that the onus is on banks to prevent APP scams.
Last year, the UK’s Payment Systems Regulator (PSR) 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.
At the time, 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.”
The research by Visa showed that one in three consumers in the UK have fallen victim to an APP scam.
According to Visa, while “large volumes” of APP scams still originate via telephone and email, in the past five years, social media and other instant messaging services have increasingly been used to target victims.