Scamdemic – predicting the future cost of authorized push payment fraud (APP)
According to UK Finance, there has been a 71% increase in APP fraud in the first six months of this year, reaching Â£ 355million (1). The question is, what does the future look like in costs? Let’s take a look at the latest results:
Before we make a prediction, let’s reveal what has changed in the six months through December 31st compared to the first six months of the year:
- There has been an improvement on some social media sites as site owners have asked companies offering investments to prove they are FCA registered before showing the paid ad.
- Some banks have banned cryptocurrency activities and when opening new bank accounts, cryptocurrencies are the order of the day.
- The payment services regulator plans to take a stronger position to encourage banks to use Payee Conformation (CoP), reviewing and possibly mandating the voluntary reimbursement model and possibly publishing individual banks’ performance. in the existing model. All implementations are expected to start next year
- A number of banks are now texting faster payment transactions to account holders’ cell phones as money leaves the account.
- The mediation service received 50,906 complaints about financial firms in the first three months of the fiscal year. Over this period, 60% of fraud and fraud complaints were accepted by the organization, compared to 50% the previous year. For the first time in over a decade, current accounts have been the most criticized product. Banks and other financial institutions must do more to fairly resolve customer complaints (2)
At this point, the same regulatory environment remains in place for the whole of 2021, along with the banks’ approach to defrauded customers, forcing many to seek the help of the mediator. By 2022, other changes could be made to prevent APP fraud, which could be adopted by regulators.
As baseball’s Yogi Berra noted, “It’s hard to make predictions, especially about the future.” A prediction of the amount of fraud in H2 2021 and going forward, it is essential to grasp the scale of AAP fraud. UK Finance official fraud figures are typically produced 90 days after semester end. By having a prediction, the accuracy behind the numbers can be assessed and changed based on what actually happened. Quick action can then be taken to stop APP fraud.
APP fraud in the first half of 2021 was Â£ 60million per month or Â£ 2million per day, a going rate of Â£ 710million per year. Bouncing from the first half of 2019 with a going rate of Â£ 416million. If this continued at the same pace through the first half of 2023, the annual execution rate could exceed Â£ 1bn per year.
Dick Turpin is possibly the most famous of the UK’s highwaymen to steal stagecoaches around York in the 1730s. The Victorians idealized Turpin’s activities and before COVID, a local phrase, “at least Dick Turpin wore a mask âwas used when someone was stealing in the light of day. Today, scammers don’t need masks, as they are largely invisible thanks to the internet, advancements in covert technology, and understanding the psychology of trust. but they need a bank account to take your money.