Authorised push payment frauds: the best and worst banks for scam refunds

Your chances of getting money back if you’ve suffered an APP scam can vary massively depending on your bank.

There is a shocking disparity between the best and worst banks for compensating those who have fallen victim to a scam, recent data from the Payment Systems Regulator (PSR) has revealed.­

The PSR looked at compensation figures relating to Authorised Push Payment (APP) scams across the 14 largest banking groups in the UK.

Coming top of the tables, TSB reimbursed customers in 88% of cases during 2023.

Next up were Nationwide and HSBC/First Direct, with reimbursement rates of 87% and 76% respectively.

Best and worst banks revealed

The banks least likely to offer refunds

At the other end of the scale, Allied Irish Bank (AIB) offered refunds in just 9% of cases.

Also near the bottom of the ranking, Danske Bank compensated 13% of scam victims and Monzo compensated customers in 17% of incidents.

Clydesdale and Virgin Money reported the largest increase in refunds, with figures jumping from 38% in 2022 to 68% in 2023.

What is an APP scam?

As the name suggests, an authorised push payment scam is where the victim is conned into giving the go-ahead for a payment to take place.

This isn’t a scammer getting hold of your personal details or gaining access to your bank account.

Instead, they manage to convince you to transfer money for what you believe are legitimate reasons.

These scams can come in all sorts of different forms, but essentially rely on the scammer posing as a legitimate business or organisations, ranging from the taxman and your bank to online retailers. 

And once the payment or money transfer has taken place, they disappear with the cash.

Getting your money back from APP scams

APP scams have been a contentious topic, because they aren’t subject to the same sorts of protections that unauthorised payments are.

Instead, we have had the industry itself come together to agree the Contingent Reimbursement Model (CRM) code, a voluntary code which means that signatories agree to refund customers when they are scammed.

There are obvious problems here, not only in the fact that it’s voluntary but also the way that different banks have been able to interpret the rules.

As we have highlighted in the past, certain banks have been accused of essentially victim blaming in the way they handle these cases.

Because of these difficulties, new rules around refunds are being implemented, which should make it easier for people to get their money back when they have been scammed. 

These rules include clearer guidance for banks, effectively removing the room for interpretation that is currently the case, as well as pushing banks to provide those refunds more quickly.

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How does your bank fare?

The new report from the PSR is the second time we have had a proper breakdown of how different banks are performing when it comes to refunding customers who are caught out by APP scams.

Let’s take a closer look at how the different banking groups compare on those refunds.

The biggest losses

The report also pinpoints how much customers of these 14 banking groups are losing to fraud for every million pounds of transactions processed.

Here’s how the data breakdown looks:

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Banks must do better

APP scams are going to continue to be a big issue, with scammers becoming ever more sophisticated in the way they attempt to con us.

It seems the current protections are not up to scratch, given how differently victims are treated by different banks.

It’s therefore welcome that clearer protections are being introduced, but ultimately only time will tell whether they are sufficient.