How to avoid authorised push payment fraud as officials slash compensation

ITV News Consumer Editor Chris Choi spoke to one fraud victim who lost much of her life savings

Officials have reduced the amount of compensation banks will pay to fraud victims. Instead of covering £415,000 of losses, only £85,000 will be covered.

Campaigners representing bank customers say the move is an “outrageous” watering down of scam protections.Authorised push payment fraud happens when someone is tricked into sending money to a fraudster posing as a genuine payee.

Banking insiders at UK Finance have called it a “tide of criminal activity targeting consumers” with there being a 12% rise in victims last year

Authorised push payment fraud happens when someone is tricked into sending money. Credit: PA

In December last year the sector’s watchdog, the Payment Systems Regulator, said the level of mandatory compensation would be £415,000 to match the upper level of awards from the Financial Ombudsman.

It would have made the UK a global leader when it comes to incentivizing banks and other financial firms to improve anti-fraud measures.

Then earlier this month, a new consultation on lowering the amount was launched - and today came the announcement that losses will only be covered up to £85,000.How can you avoid APP fraud?Fraud is the most common crime in the UK.

The bank industry’s own trade association, UK Finance, says: "Sophisticated fraudsters exploit moments of vulnerability and stress, establishing authority bias and urgency to deceive victims."The most common deceptions include fake bank statements, hacked emails and convincing phone calls.

It’s vital that consumers look out for any requests urging them to move money quickly due to an invented deadline.

Always question unsolicited calls, texts or emails. Remember email addresses and phone numbers can be “spoofed” to look like they come from trusted sources.

The best way to contact a company or organisation to check things is to use known email and phone numbers such as the one on the back of your bank card.

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