{"id":2090,"date":"2024-10-22T17:00:00","date_gmt":"2024-10-22T17:00:00","guid":{"rendered":"https:\/\/omg.one\/blog\/?p=2090"},"modified":"2024-11-07T11:19:37","modified_gmt":"2024-11-07T11:19:37","slug":"app-fraud","status":"publish","type":"post","link":"https:\/\/omg.one\/blog\/app-fraud\/","title":{"rendered":"Essential Tips to Safeguard Against APP Fraud: A Comprehensive Guide"},"content":{"rendered":"\n

Technology has sparked wonders in the financial sector, streamlining business processes and enabling a more globalised economy through ever-evolving innovations like AI and blockchain, which have now become the norm. <\/p>\n\n\n\n

Despite this, cyber security remains the major challenge, as threat actors continue to exploit financial consumers whether they know it or not. One of the most common cyber threats to date is the APP (Authorised Push Payment) fraud, and if you are reading this, you are in the right place. <\/p>\n\n\n\n

This article delves into an overview of everything you need to know about APP fraud, including the recent changes to the fraud reporting procedure as of October 2024 and steps you can take to prevent yourself from getting scammed.   <\/p>\n\n\n\n

Understanding APP Fraud <\/h2>\n\n\n\n

In 2023, APP fraud alone caused 341 million in losses<\/a> to many unfortunate victims in the UK, with over 224,000 reported incidents (a 12% increase in volume from 2022). APP fraud continues to be a major thorn in the side of financial institutions. <\/p>\n\n\n\n

\"APP<\/figure>\n\n\n\n

So, what does APP fraud look like in practice? Simply put, it is when a scammer pretends or poses to be a legitimate, trusted company and entices unknowing victims into making a bank transfer to them. Their common tactic is creating a false sense of urgency along the lines of \u201cTake action now before you lose your [asset]\u201d or \u201cYour account has been withheld due to X; please make your payment immediately.\u201d <\/p>\n\n\n\n

If someone falls prey and sends money to this account, the money will be promptly moved elsewhere without a trace, and victims will only know until their actual financial institution sends them payment alerts (often, this is the stage where it\u2019s already too late). <\/p>\n\n\n\n

Scammers can also use very similar email addresses to trusted companies, such as using \u201c.co.uk\u201d <\/em>instead of \u201c.com\u201d<\/em> or using two v\u2019s in domain names (@abclaw.com<\/em> vs @abclavv.com<\/em>). The difference can be very subtle, so you need to be vigilant. <\/p>\n\n\n\n

Reporting APP Fraud <\/h2>\n\n\n\n

If you think you have been scammed, please do the following: <\/p>\n\n\n\n

\"Key<\/figure>\n\n\n\n
    \n
  1. Contact your bank immediately and inform them of the fraudulent payment. <\/li>\n\n\n\n
  2. Report the fraud by calling 0300 123 2040 (if you reside in England or Wales) or the police at 101 (if you reside in Scotland). Alternatively, you can also report fraud on Action Fraud\u2019s website<\/a>.<\/li>\n\n\n\n
  3. Take note and follow their instructions. <\/li>\n\n\n\n
  4. If you got scammed on or after 7 October 2024, you may be eligible for reimbursement under the MRR (Mandatory Reimbursement Regime); please see below. <\/li>\n<\/ol>\n\n\n\n

    Mandatory Reimbursement Rules (Updated as of October 2024)<\/h2>\n\n\n\n

    For context, there was a voluntary code for reimbursing APP fraud victims called the Contingent Reimbursement Model (CRM), and it proved helpful as the system was able to return a majority of the losses through APP fraud. However, due to its voluntary nature, many institutions were not obligated to reimburse their customers as they were not signatories. <\/p>\n\n\n\n

    Hence, the MRR was formed to address this on 7 October 2024, requiring all sending payment service providers (PSPs) to reimburse APP fraud victims. As an incentive, the sending payment service providers will then be able to seek half of the reimbursement cost from the receiving payment service provider. <\/p>\n\n\n\n

    Reimbursement Eligibility Requirements <\/h3>\n\n\n\n

    To be eligible for the reimbursement, you must:<\/p>\n\n\n\n