New research from Visa reveals the negative impact of authorised push payment (APP) fraud on UK consumers beyond the financial loss.

APP fraud occurs when someone is tricked into transferring money to a fraudster posing as a genuine payee. Total losses due to APP scams exceeded £239 million in the first half of 2023 according to UK Finance, and 1 in 3 of those surveyed by Visa reported having fallen victim to APP fraud.

Visa’s latest whitepaper, The Impact of APP Scams, explores the victim experience and demonstrates the impact APP fraud can have on money management, financial confidence, and personal wellbeing.

The research found that whilst nearly three fifths of UK consumers (58%) are confident in managing their finances, falling victim to an APP scam can change money management habits. Almost a fifth (19%) of those surveyed that have fallen victim to an APP scam say that the scam has decreased their confidence in digital banking, and more than a third (35%) say it had a negative impact on their openness to paying new payees.

In addition, 1 in 3 of those surveyed reported that their mental health suffered as a result of APP fraud, and almost half (45%) feel at risk of falling for the scam again.

Visa is calling for cross-industry collaboration to fight fraud, with an increased focus on prevention measures – stopping the money leaving victims’ bank accounts and ending up in the hands of criminals.

Mandy Lamb, managing director, UK & Ireland, said: “Falling victim to a scam can be incredibly distressing. Our research shows that even with all the security measures introduced by banks, fraud can have a devastating impact on people’s ability to manage their finances, even when they get their money back.

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“Once fraud happens, the money is in the hands of the criminals, and both consumers and the economy are penalised with loss of savings, income and taxes. Fraud prevention must be our collective goal and cross-industry collaboration to stop fraud at the source will be crucial to achieving this. We are bringing our AI capabilities to fight fraud before it happens – keeping people and businesses safe from scammers is the biggest priority for Visa.”

To help consumers’ financial confidence, Visa is offering tips and advice for preventing fraud and what to do you if you think you’ve fallen victim.

Visa’s tips for preventing fraud:

• Validate they are who they say they are – it can be hard to tell the difference between legitimate organisation and sophisticated scammers. If you are unsure, you can check by using a different form of communication to the one they have used to reach you. For example, if you get a text asking for bank information, try phoning the company directly to check if it’s a true request.

• Be wary of unexpected contact – cold calls or unexpected emails should raise your suspicions. Remember, it is highly unusual for legitimate organisations to ask for sensitive information or personal details with no prior warning so don’t respond without confirming validity.
• Stop and think – always take the time to consider whether a payee is genuine. Don’t feel pressured to rush a payment, as a legitimate organisation will not put pressure on you to rush. If you’re unsure, talk it through with someone you trust. They may have received a similar message and might be able to help advise on the best course of action.

And if you do fall for a scam, Visa recommends the steps you can take to regain your confidence.

• Recognise that you are not alone – unfortunately, it is not uncommon to fall victim to APP scams. Talking about your experiences with friends and family can help alleviate feelings of guilt and encourage you to rebuild your confidence.

• Reach out for support and advice – please contact your bank if you think you might have fallen victim to APP fraud. They will be able to provide expert help and advice, and are working round the clock on fraud prevention. In addition, resources such as Action Fraud and Victim Support can provide help after crime. These organisations gives free and confidential support and are open 24 hours a day, seven days a week, 365 days a year.