In today’s increasingly digital world, fraudsters continue to adapt and exploit vulnerabilities, with Authorised Push Payment (APP) scams posing one of the most significant threats to consumers. These scams, where individuals are tricked into sending money to fraudulent accounts, cause financial loss and emotional devastation, eroding trust in payment systems and the broader digital ecosystem.
According to the Payment Systems Regulator (PSR) APP Fraud Survey 2024, APP scams cost UK consumers £341 million in 2023. Victims of these scams report losing not only money but also confidence in using new payment methods and platforms. These scams severely harm consumer trust in banks, social media platforms, telecoms, and online marketplaces.
How fraudsters exploit major platforms
The PSR’s latest report underscores how fraudsters use social media, telecoms, and technology platforms to contact victims and execute scams. The findings reveal alarming trends:
- Meta platforms dominate scam incidents: Over 54% of scams (119,338 cases) in 2023 involved Meta platforms such as Facebook, Instagram, and WhatsApp, resulting in £62.7 million in losses—approximately £1 in every £5 lost to scams.
- Telecoms and emails cause disproportionate damage: Fraudulent calls and texts via telecoms accounted for 12% of scams (26,975 cases) but caused 31.5% of total losses (£107.2 million). Emails, while involved in just 2% of cases, led to £35 million in losses, highlighting their outsized impact.
- Purchase scams dominate Facebook activity: The most common scam type in 2023 was purchase scams, where victims pay for items that never arrive. Facebook alone accounted for 44% of these scams (67,337 cases), with losses totalling £19.5 million.
- Romance scams thrive on Meta platforms: Meta platforms were linked to 31% of romance scams, surpassing all dating websites combined. These scams resulted in £5.1 million in losses across Facebook, Instagram, and WhatsApp.
- Investment scams cause the largest financial losses: Despite representing just 6% of scams (12,500 cases), investment scams caused 23% of total losses (£80.3 million). Fraudsters used telecoms (£18.4 million in losses), Meta platforms (£11.6 million), and even friends and family connections (£9.6 million) to deceive victims.
- High-value scams on eBay: Although eBay accounted for only 1.6% of scams, the total losses reached £6.7 million, making it a platform with a notably high cost per incident compared to others.
Collaboration across sectors
The PSR has introduced reimbursement rules to protect APP scam victims and encourage banks to take proactive measures. However, tackling scams requires a collective effort from social media companies, telecoms providers, and payment firms. Key actions include:
- Enhanced data sharing: Greater transparency and collaboration are vital to identifying and closing vulnerabilities across the payment ecosystem.
- Proactive prevention: Platforms must take responsibility for monitoring and addressing fraud risks to stop scams at their source.
- Annual reporting: Regular publication of fraud data ensures accountability and highlights progress in combating scams.
How Neopay can help
At Neopay, we understand the importance of safeguarding consumers and restoring trust in payment systems. With our expertise in compliance, risk management, and regulatory frameworks, we help businesses fortify their defences against fraud. Our tailored services include:
- Compliance consulting: Develop robust frameworks to address vulnerabilities.
- Training and awareness: Equip teams with the knowledge to detect and prevent scams.
- Audit services: Identify and mitigate risks in your systems and processes.
Contact Neopay today to learn how we can help protect your business and your customers.