‘Authorized Push Payment’ Bank Fraud: What Does an Effective Regulatory Response Look Like?

Abstract

ABSTRACT Authorized Push Payment (APP) fraud occurs where bank customers are tricked into transferring money from their account. As this article shows, this type of fraud is a growing threat, catalysed by the rise of remote banking. However, long-standing legal and regulatory rules leave most victims without a route to redress, as recently confirmed by the UK Supreme Court’s 2023 decision in Philipp v Barclays. Through this lens, the article examines a new and ‘world first’ UK regulatory response, which includes a mandatory reimbursement scheme for APP fraud victims in certain circumstances. The article finds that the UK’s new loss allocation scheme is valuable, but also that its specific coverage is problematic given the broad nature of this threat. Overall, the article argues that the priority for UK regulators should be to develop a more ‘joined-up’ response to APP fraud, and it offers generally applicable insights into effective regulatory responses to this evolving threat.