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The UK’s Payment Systems Regulator (PSR) has released data on authorised push payment (APP) fraud's devastating impact on UK consumers, with losses exceeding £213m in the first half of this year alone.
The PSR’s research underscores the urgent need for enhanced fraud prevention and consumer protection across industries, with the regulator releasing its findings to coincide with International Fraud Awareness Week.
The research identifies social media platforms as a significant area of concern, with 41 percent of fraud victims reported losing trust in social media companies — a figure four times higher than those who lost faith in traditional banks.
This emphasises the need for online platforms and marketplaces to take greater responsibility for combating fraud, particularly as scams increasingly exploit digital spaces.
The new research follows the regulator’s recent letter to online, social media and tech firms, in which it confirmed that it plans to publish new data on the firms most commonly reported by victims as enabling contact between fraudsters and victims.
According to sources close to the regulator, its findings are due to be released next month.
Impact on the ecosystem
To produce its report, the PSR surveyed more than 1,500 UK adults and was able to gain valuable insight into the wide-ranging consequences of fraud.
Although the most common APP fraud cases involve relatively low-value scams (under £200), the emotional toll can be severe, according to the regulator.
For example, one in five victims reported feelings of anxiety or depression, 50 percent experienced diminished trust in others and 32 percent said the experience reduced their confidence in using new payment methods.
When asked about their priorities following a fraud incident, 67 percent of victims highlighted reimbursement as their top concern.
Other priorities included 19 percent wanting the removal of fraudulent content and 7 percent saying investigating the fraud should be the priority.
Reimbursement not only alleviates financial stress, but also mitigates emotional harm, with the PSR finding that victims who are reimbursed are less likely to suffer long-term anxiety or depression and often feel more vigilant about fraud risks.
Contrary to assumptions, it seems reimbursement does not foster complacency, but rather strengthens consumer confidence in managing future financial transactions.
Victims that were not reimbursed were twice as likely to distrust banks, mobile wallets and online challenger banks than those who received compensation, and even among reimbursed victims, a sizable minority reported losing confidence in managing money online, investing or using new financial products.
“This research emphasises the devastating impacts of fraud on consumers’ mental wellbeing and trust,” said Kate Fitzgerald, the PSR’s head of policy.
“APP fraud isn’t just a financial setback, it affects people’s confidence in payments and can leave them fearful of using digital platforms and retailers in the future.”
Fitzgerald warned that with big shopping events such as Black Friday fast approaching, it is crucial that consumers stay vigilant “but not fearful”.
“That’s why our new protections are so important. Now, consumers can feel reassured that if they fall victim to APP fraud despite taking the right precautions, they will be able to get their money back.”
