APP Fraud in the Spotlight: What the Latest Figures Mean for Banks

Authorised Push Payment (APP) fraud has again been in the headlines this month, reflecting continued scrutiny of banks’ reimbursement decisions and the overall effectiveness of the UK’s fraud‑prevention framework. For the banking sector, this recent focus demonstrates: 

1. First, continuing interest in how institutions investigate and take responsibility for fraud‑related complaints.
2. Second, an improving landscape for consumers, driven by significant investment in fraud prevention and the introduction of the Payment Systems Regulator’s (PSR) mandatory reimbursement regime. In turn, of course, this increases pressure on banking institutions. 

Complaint Trends and Ombudsman Findings

Recent reporting in The Guardian highlights Financial Ombudsman Service (FOS) data showing that, when customers challenge a bank’s initial refusal to reimburse a fraud claim (including APP fraud, as well as chip and pin fraud and identity theft), the Ombudsman is overturning the bank’s original decisions in around 30% of cases for several major UK banks. Although overturn rates vary between firms, the figures underline that customers are actively challenging initial decisions, and that the Ombudsman is frequently finding in favour of complainants.

For banks, high overturn rates increase reputational exposure and also highlight the need for well‑evidenced and consistent decision‑making, supported by strong internal governance. Customers increasingly expect their bank to respond quickly, communicate clearly, and resolve cases without unnecessary escalation. Where those expectations are not met, the risk of Ombudsman intervention rises.

A More Positive Picture on APP Fraud Reimbursement

However, recent data from the PSR published by The Banker offer a more positive outlook on reimbursement outcomes for APP fraud, for the 12 months to September 2025:

• Higher reimbursement rates: Under the PSR’s mandatory reimbursement regime (in force since October 2024), UK banks have paid out £173 million, achieving an 88% reimbursement rate, up significantly from roughly two‑thirds of claims in 2023–24.
• Faster claim resolution: 82% of APP fraud claims are now concluded within five business days.
• Low rejection rates: Only 3% of claims were rejected on the grounds of customer negligence.
• Fewer total claims: There were fewer eligible claims in total during the year to September 2025, suggesting that improved analytics, customer warnings and payment‑screening tools are successfully intercepting more scams upstream.

These figures demonstrate clear improvements for customers. They do, however, highlight the material impact – both financially and in terms of time commitment – on banks dealing with these claims, and therefore the importance of ensuring that fraud detection and prevention policies are in place. 

Looking Ahead

APP fraud will remain a top‑tier priority for banks throughout 2026. Despite the encouraging trajectory, further investment in customer education, scam‑intervention tools and enhanced monitoring remains essential. Crucially, the industry debate on shared liability is intensifying. As The Banker notes, many scams originate not within the banking system but on online platforms and social‑media channels. Banks continue to argue that meaningful, long‑term reductions in APP fraud will require these sectors to take greater responsibility for preventing fraud at source.

The FCA and PSR are reviewing the findings of an external assessment of the reimbursement regime, with any potential changes expected to become clearer later in 2026.

This article was written by Elizabeth Pouget and Caroline Brown. 

Burges Salmon’s cross‑disciplinary fraud, financial services and disputes teams support banks navigating these developments, including complaint‑handling strategy, regulatory engagement and litigation risk. If you would like to discuss this further, we would be delighted to assist; please contact Caroline Brown or Elizabeth Pouget.