Authorised Push Payment (APP) Fraud

Impersonation Fraud
Fraudsters pose as legitimate entities, such as banks, police, or government agencies (e.g., HMRC). Victims are convinced to send money urgently to resolve fictitious issues. Businesses are particularly vulnerable around tax deadlines, and high-profile figures like WPP CEO Mark Read have been targeted in sophisticated impersonation schemes.

Investment Scams
Fraudsters are targeting victims by offering fraudulent investment opportunities in binary options, contracts for difference (CFD) forex and cryptocurrencies which typically promise high returns and use images of luxury items, like expensive watches and cars, to entice people to invest in their scams. After someone has invested, they distort prices on their website, tie people in with extreme pay-out clauses and even close customer accounts, refusing to pay back their money.

Loan Fee Scams
Victims are asked to pay upfront fees for loans that do not exist. The Financial Conduct Authority (FCA) warns that hundreds of reports are filed each year, with an average loss of £255. High mortgage rates have made homeowners more vulnerable to these scams as they seek short-term credit.

Advance Fee Scams
Similar to loan fee scams, victims are asked to pay an upfront fee to receive a large inheritance or lottery prize. These scams often begin with a letter or email advising that you have won a prize and request that you send a payment as a release fee to receive your prize.

Payment Diversion
Fraudsters intercept genuine transactions, altering invoice details to divert payments to their accounts. Businesses are common targets, where fraudsters will hack into email accounts to change payment details.

Before authorising any payment, ask yourself the following questions:

1. Is it too good to be true?
   If an offer seems disproportionately rewarding with no apparent downside, it likely is a scam.
2. Is the communication unusual?
   Be wary of uncharacteristic or overly informal language. Legitimate entities usually avoid asking for money via unsolicited communication.
3. Do I feel pressured?
   Fraudsters often create a sense of urgency to rush victims into making hasty decisions. Legitimate institutions rarely pressure you into immediate payments.
4. Is the payment method familiar?
   Consider whether the method of payment, payee, and amount seem normal based on your past transactions. Sudden deviations may indicate fraudulent activity.
5. Am I being asked for sensitive information?
   Legitimate entities rarely ask for personal or financial details via text or email. In 2023, the FCA banned financial cold calling to protect consumers.

The APP Fraud Reimbursement rules only apply to payments sent from 7 October 2024 between UK accounts using Faster Payments or CHAPS by consumers, microenterprises (fewer than 10 employees and either an annual turnover under €2 million or annual balance sheet total not exceeding €2 million), and small charities (being charities as defined by law and having an income under £1 million per year).

If you need to claim for an APP payment scam:

• the maximum amount you can claim is £85,000
• an excess of £100 may be deducted from the claim amount (unless you are deemed to be a ‘vulnerable consumer’)
• we will reimburse eligible claims within five business days unless we need further information to assess your claim, in which case we will either reimburse you or confirm that the claim is rejected no later than 35 business days after you contact us.

You must report the scam to us as soon as possible and provide the information we need to investigate your claim properly.

There are some circumstances where you may not be entitled to a refund under the new rules, for example if:

• the payment was made to another account which you control, or it was sent to or from an account outside the UK
• you ignored warnings provided by us or the police that the payment was likely to be a scam
• you acted fraudulently or dishonestly
• you are claiming for an amount which is the subject of a private civil dispute or which you paid for an unlawful purpose
• it is more than 13 months since you made the last APP scam payment.

By staying vigilant, being aware of common scams you can help protect yourself from APP fraud.

Please contact us on 0208 610 9599 to report any fraud concerns or send us an email at fraud@shieldpay.com during our business hours: Monday – Friday from 9am until 5pm.