{"id":87469,"date":"2023-02-07T09:23:00","date_gmt":"2023-02-07T09:23:00","guid":{"rendered":"https:\/\/cloudnewshub.com\/?p=87469"},"modified":"2023-02-07T09:23:00","modified_gmt":"2023-02-07T09:23:00","slug":"app-fraud-reimbursement-proposal-is-fundamentally-flawed-say-mps","status":"publish","type":"post","link":"https:\/\/cloudnewshub.com\/?p=87469","title":{"rendered":"APP fraud reimbursement proposal is \u2018fundamentally flawed\u2019, say MPs"},"content":{"rendered":"
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A proposed method of reimbursing victims of authorised push payment (APP) fraud has an \u201cinherent\u201d conflict of interest that makes it \u201cfundamentally flawed\u201d, according to a Treasury Committee report.<\/p>\n

The cross-party Treasury select committee report on proposals put forward by the Payment Systems Regulator (PSR) for reimbursing APP victims said handing control of process to a body sponsored by the banking industry would create a conflict of interest.<\/p>\n

The PSR proposed that banks and building societies would be required to fully reimburse victims of APP scams within two days of the fraud being reported, where the loss is over \u00a3100.<\/p>\n

The proposal is welcomed because APP fraud is a growing problem. It occurs when criminals use fake websites and emails to trick consumers into authorising payments to them. Because payment is authorised, it bypasses the security systems banks have in place to prevent fraud.<\/p>\n

This type of fraud caused losses of $789.4m to UK citizens in 2021, which could rise to $1.56bn by 2026, according to a report from payments software supplier ACI Worldwide<\/a> and analytics firm GlobalData<\/a>.<\/p>\n

In its proposed reimbursement scheme, the PSR hands responsibility for implementing the mandatory reimbursements to Pay.UK, which is guaranteed by the financial services companies.<\/p>\n

Following the publication of the Treasury Committee report \u2013 Scam reimbursement: pushing for a better solution \u2013 <\/em>committee chair Harriett Baldwin MP said putting an industry body in charge of reimbursing victims of APP fraud would be \u201clike asking a fox to guard the henhouse\u201d.<\/p>\n

\u201cVictims of fraud have been waiting far too long for a fair and functional scam reimbursement scheme,\u201d she added. \u201cHowever, while these new proposals are a step in the right direction, the way the regulator plans to implement them is fundamentally flawed.\u201d<\/p>\n

The committee called in the PSR to take back control of the reimbursement process.<\/p>\n

APP scams are often instigated through social media platforms, where victims are contacted and tricked into making payments. But the social media companies are not expected to contribute to the repayments to bank customers.<\/p>\n

In 2021, Anne Boden, CEO of digital challenger Starling Bank, called for cooperation between different sectors<\/a> to clamp down on APP fraud.<\/p>\n

In a blog post<\/a> at the time, Boden said other sectors must shoulder some responsibility for APP scams, particularly social media platforms. \u201cBanks invest billions of pounds in tackling economic crime, but we cannot stop it on our own,\u201d she wrote.<\/p>\n

\u201cVery often, [social media] accounts are used for advertising for \u2018money mules<\/a>\u2019 for the purposes of money laundering, selling stolen identity and credit card data, phishing, bogus investment scams and impersonation fraud.\u201d<\/p>\n

Boden said banks \u201cseem to have become the underwriter of all kinds of fraud that are not really financial fraud at all\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"

A proposed method of reimbursing victims of authorised push payment (APP) fraud has an \u201cinherent\u201d conflict of interest that makes it \u201cfundamentally flawed\u201d, according to a Treasury Committee report. The cross-party Treasury select committee report on proposals put forward by the Payment Systems Regulator (PSR) for reimbursing APP victims said handing control of process to […]<\/p>\n","protected":false},"author":1,"featured_media":87470,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[533],"tags":[],"class_list":["post-87469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-it"],"_links":{"self":[{"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/posts\/87469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=87469"}],"version-history":[{"count":0,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/posts\/87469\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=\/wp\/v2\/media\/87470"}],"wp:attachment":[{"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=87469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=87469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cloudnewshub.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=87469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}