Payment scam policies reduce fraud and improve consumer protection

An independent evaluation by Frontier Economics has found that the UK's Authorised Push Payment (APP) scam policies have delivered net benefits in their first year, reducing fraud losses and strengthening protection for consumers.

Commissioned by the Payment Systems Regulator (PSR), the evaluation was jointly delivered by our Public Policy and Financial Services experts, and examined the impact of the APP scam reimbursement requirement introduced in October 2024 and the publication of APP fraud performance data.

The research found that APP fraud losses sent over Faster Payments fell by around 21% following implementation of the reimbursement requirement. This is equivalent to a reduction of £73m per year in APP scam losses.

The evaluation also found that reimbursement rates increased from 54% before the policy to 65% after implementation. Consumers therefore benefited from both fewer scams and greater protection when scams occurred.

A key finding was that the reimbursement requirement strengthened incentives for payment service providers (PSPs) to invest in fraud prevention. PSPs reported introducing stronger fraud controls across both sending and receiving payments, with the largest reductions in fraud occurring among firms that previously experienced the highest fraud rates. The policy is estimated to have increased PSP costs by £44m to £56m per year, due to costs from fraud prevention, claims handling, dispute management, reporting and compliance.

The evaluation concluded that the policies have broadly achieved their short-term objectives by:

• Reducing APP fraud levels.
• Increasing reimbursement for victims.
• Strengthening incentives for PSPs to tackle fraud.

Overall, the study found that benefits likely exceeded costs in the first year after implementation. The reduction in APP fraud likely outweighed the costs borne by PSPs and the potential shift in fraud activity towards channels outside the scope of the reimbursement requirement as a result of the policies.

While the findings are positive overall, consumer outcomes remain uneven across PSPs, and longer-term impacts on competition, innovation and market behaviour remain uncertain.

The reduction in APP scams over Faster Payments also needs to be considered in the context of the wider financial fraud landscape. Domestic consumer APP fraud is only a fraction of the £1.3bn of total fraud losses reported in 2025.

Click here to read our summary report

Click here to read the full technical report