APP fraud: reimbursement rules

APP fraud happens when a consumer (as defined by the PSR) is deceived into approving an electronic payment which is not for the purpose you believed it to be, or the recipient is not who you intended to pay.

The new rules will apply to transactions made from 07 October 2024.

It will now be mandatory for Financial Institutions to reimburse clients who are victims of APP fraud. There are exceptions to the rule which are covered in the following questions (see points 4 through to 7).

It is only applicable to individuals, micro-enterprises and charities using the payment services of UK Financial Institutions where those payments have been made between UK accounts only. The UK crown dependencies (Isle of Man and Jersey) are not currently required to adhere to the new rules.

There will be no reimbursement applied where the client doesn’t meet the Consumer Standard of Caution Exception. This could include instances where the:

• Client account holder had no response to any intervention made by their financial institution or the Competent National Authority (CNA).
• Client account holder didn’t report the APP scam promptly, upon learning/suspecting they fell victim to the scam.
• Client account holder has not responded to reasonable and proportionate requests for information.
• Client account holder did not consent to a:
  • Request to report the APP scam to the Police
  • Request to directly report the APP scam details to a CNA

A claim will also not be upheld if:

• The claim is reported more than 13 months after the final payment.
• The victim is party to the fraud.
• The claim is fraudulent or dishonest.
• The claim is for an amount which is the subject of a civil dispute or other civil legal action.
• The claim is for a payment made for an unlawful purpose.
• The payment was made by a client or account not with NPWL.
• The account holder is not a consumer.
• The account is not located in UK.
• The Funds are not settled through FPS (or, in the future, CHAPS).

The upper limit is £85,000.

A claim can also be made through the Financial Ombudsman Service in the UK.

Clients who fall victim to APP fraud are required to be reimbursed within five business days. However, this could take longer if we are awaiting a response to additional information required to assess the claim. There is a possibility that it can take up to 35 days in complex cases.

If you have been a victim of an APP scam, please call +44 (0)1624 645000 between Monday to Friday, 8am to 8pm (UK time), except for UK public holidays. Alternatively, call +44 (0)20 8167 3223 between Monday to Friday 8pm to 8am (UK time), weekends and UK public holidays.

It’s also important that you check your statements and find the transactions you would like us to investigate, which can then be reported to us on the initial report.

Please contact us first using one of the numbers above. Once you have done that:

For clients in England, Wales or Northern Ireland:

• For fraud that’s part of another crime, like bag theft, please report it to the police online or by calling 101.
• Otherwise, please report it to Action Fraud online or by calling 0300 123 2040

For clients in Scotland, please report the fraud to the police by calling 101.

Impersonation – When someone pretends to be the police, a bank, a friend or business, to convince you to send them money.

Investment – When an individual is invited to invest in things that are worthless, or don’t exist.

Purchase – When fake or non-existent items are advertised for sale.

Advanced fee – When fake companies ask for an upfront fee and then don’t provide the service you’ve paid for.

Invoice – When account details on an invoice are changed, or emails are intercepted, so the money is wrongly paid into the scammer’s account.

Romance (Relationship) – When someone pretends to be interested in a romantic relationship with you. They gain your trust and then ask for money.

Pension – A scammer says they can make you money, and convinces you take a lump sum out of your pension – then steals it.

Doorstep (Salesperson) – A rogue trader knocks on your door and pretends your house needs work – then overcharges you for it and often doesn’t finish the job.

Bereavement – A scammer contacts you after someone has died, and says you owe money to pay off a debt or to access a payout.

Phishing, smishing and vishing – You receive an email, text message, or call claiming to be from a well-known company or organisation such as a bank or the police.

Be sceptical and vigilant
Be wary if you transfer money to someone and it bounces back straight away. You might have sent it to an account that’s been closed for fraud. Don’t try to make the payment again, especially if the person gives you new details immediately or asks you to pay in another currency. Contact us in these instances.

Always be wary when you are unexpectedly approached for investments or requests for money.
Remember – if you feel embarrassed or uncomfortable talking about the situation, it could be a sign that something’s not right. Consider consulting a qualified financial adviser before investing your money.

Ask questions and do research
Keep in mind that fraudulent websites and reviews also exist and are not 100% guaranteed that the place is legitimate.

Read reviews of the sites or companies you’re thinking about dealing with. Don’t rush into making any payments. Check their web address too, to make sure the site is genuine – check there aren’t subtle misspellings in the web address and make sure there’s a padlock symbol shown next to the address in your browser.

When you transfer money, tell us the real reason
When you transfer money, we ask you tell us the reason for your payment so we can help protect you from scams. Scammers often try to trick you into selecting the wrong reason, so you see the wrong warnings.

Always take the time to select the right reason for your payment. If someone asks you to select one that doesn’t match what the payment is for, it’s probably a scam.

If you think you might have already paid a scammer, please report the scam to us

• If you get a message about account activity you were not expecting, call us immediately on a trusted number.
• Don’t click on links contained in an SMS message.
• Do not reply to emails or phone calls
• Do not call the number back
• Look up an organisation online and only call if they are genuine
• Never transfer money to anyone you don’t know
• Never reveal your one-time passcode to anyone
• Question what you’re told – you haven’t done anything wrong
• If you want to access online banking, do so through the app or known website, which you can find on Google (not Google Ads or Google sponsored adverts)

Remember, we’ll never contact you by phone, text or email to ask you to:

• Move money to another account
• Help with an ‘internal investigation’
• Give us access to your device to view or manage your accounts
• Reveal any of your passwords or passcodes (we will only as for characters for your telephone password and will never ask for any passcodes)

We’ll also never

• Disclose your personal details to prove it’s us
• Ask for a one-time passcode
• Text you unexpectedly with a link to make a payment