Short Definition:
APP fraud happens when someone is tricked into authorising a bank transfer to a fraudster, believing they're paying a legitimate person or business.
Full Explanation:
Because the victim authorises the payment themselves — unlike card fraud, where a criminal makes an unauthorised transaction — banks historically treated APP losses as the customer's problem. That changed on 7 October 2024, when the Payment Systems Regulator made reimbursement mandatory for qualifying APP fraud on Faster Payments and CHAPS, covering individuals, microenterprises and charities. Liability is now shared between the sending and receiving payment firm, and reimbursement rules apply to all qualifying APP transactions made via Faster Payments or CHAPS. The PSR is consulting further in December 2026 on scope changes, after its own review found outcomes still inconsistent for some victims — so the current rules should be treated as the baseline, not the final word.
In Practice:
A finance lead at a UK SMB pays what looks like a genuine supplier invoice, but the bank details have been swapped by a fraudster (a classic "invoice redirection" scam) — the business is a microenterprise, so it qualifies for the same mandatory reimbursement protection as an individual consumer, provided the claim isn't ruled a civil dispute or caught by an exception.
Acronym:
APP
Related Terms:
Please select different callback for this field.
Source Link:
https://www.psr.org.uk/information-for-consumers/app-fraud-reimbursement-protections/
Last Reviewed:
20260725
