UK Finance has released its Annual Fraud Report, reinforcing that we must not accept APP scams as an endemic part of life.
We must move resolutely away from the cure-over-prevention focus that dominates the landscape at present. The key question all sectors and industries should be asking is: How can we stop APP scams occurring in the first place?
No-one should be out of pocket because of criminal activity. Evidence shows scams impact victims’ mental health, leaving long-lasting feelings of guilt and shame. Reimbursementalone cannot reverse this damage; nor does it reverse the fact that the proceeds of scams often fund organised and other serious crime.
Relying solely on reimbursement diverts focus from preventing harm and stopping scams in their tracks.
The voluntary Contingent Reimbursement Model Code (CRM Code) is the only set of protections that require signatory payment service providers to detect APP scams, prevent them from happening and respond to them when they are successful.
Evidence shows the CRM Code’s introduction, and its prevention focus, has stalled an exponential rise in APP scams. That said, we must not rest on our laurels and payment service providers should not be treated as the only line of defence against these criminals.
Often by the point of payment it is too late. Social engineering has convinced the victim that the payment is legitimate. The earlier prevention steps are taken, the greater the chance of protecting the customer.
Other sectors involved in the scam journey – including utilities, telecommunications, and social media – must step up to the plate, identify how they can intervene and act on this immediately.
Meanwhile, firms that are eligible to sign up to the CRM Code must work towards this as a matter of urgency.
Emma Lovell, chief executive, Lending Standards Board