Ever wonder if banks and scammers are playing an endless game of cat and mouse? Well, the good news is, the banks have been making some big moves with the CRM Code—but the game is about to change. Let’s dive right into the latest on how fraud protection is evolving.
The CRM Code, a set of rules that require signatory Payment Service Providers (PSPs) to detect, prevent, and reimburse customers who fall victim to Authorised Push Payment (APP) fraud, is set to end on October 7th. With new statutory rules taking over, the CRM Code’s legacy and impact on APP fraud will continue to resonate—reimbursement rates increased from 23% to 73%, and fraud growth slowed dramatically.
How It Works:
APP fraud is when scammers trick people into authorizing payments to fraudsters, often by posing as trusted entities like banks, utility companies, or even friends. The CRM Code, which launched in 2019, required participating PSPs to go above and beyond by detecting suspicious payments, preventing fraud, and reimbursing customers who weren’t at fault.
Who’s Targeted:
In 2023, over 90% of APP fraud cases involved customers of signatory PSPs. The victims are often everyday people and businesses tricked into making payments to fraudsters disguised as trusted figures. Vulnerable customers, including the elderly and those less tech-savvy, were especially targeted.
Real-Life Example:
A common APP fraud example involves a scammer posing as a bank official, convincing a customer to transfer their savings to a "safe" account. These scams can be emotionally distressing, leaving victims devastated, but the CRM Code helped many victims by offering them a lifeline—reimbursement.
Why You Should Care:
Reimbursement helps recover lost funds, but it can’t always undo the emotional toll. The CRM Code’s impact has been positive, slowing the growth of APP fraud and reducing the average stolen amount per case. However, the new statutory framework introduces a cap on reimbursements at £85,000 and allows banks to charge up to £100 per claim. Without prevention measures, the risk of more frequent and costly fraud might increase.
How to Protect Yourself:
- Verify Before You Transfer:
Always double-check payment requests. Call the person or organization directly using a trusted number to confirm the payment. - Beware of Urgency:
Scammers often create a sense of urgency. Slow down, think, and verify the source before making any payments. - Use Effective Warnings:
Pay attention to warnings provided by your bank during transfers. They’re there for a reason—don’t ignore them! - Check for Reimbursement Policies:
Make sure your bank is still offering strong protections like those under the CRM Code, even after October 7th. - Stay Informed:
Keep up with new rules and ensure your PSP is taking appropriate measures to prevent fraud.
Quick Tips & Updates:
- Did You Know? APP fraud is one of the fastest-growing types of financial fraud, and banks now play a key role in reimbursing victims.
- Pro Tip: Even though new regulations are coming, prevention is always the best defense. Ask your bank about fraud detection tools!
Have you or someone you know been a victim of APP fraud? Share your story with us—your experiences could help others stay protected!
Stay safe, stay informed, and always double-check those bank transfers. Scammers may be tricky, but with the right precautions, we can stay one step ahead.
Key Terms Explained:
- Authorised Push Payment (APP) Fraud: A scam where victims are tricked into authorizing payments to fraudsters.
- Payment Service Providers (PSPs): Financial companies, like banks, that offer services for sending and receiving payments.
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