The Battle Against APP Fraud

What is APP Fraud?

Sextortions, Granny Scams, Pig Butchering, Romance and Pension investment scams  are all types of a brutal new wave of authorised push payment fraud (APP fraud) that are very sadly on the rise in the UK. APP fraud is a type of payment fraud in which the victim is tricked into authorising a payment to a fraudulent individual. This can be done through a variety of methods, such as phishing emails, fake websites or social engineering.

Latest Data

According to the latest data, APP fraud has soared to unprecedented levels in the UK, with reported incidents reaching an all-time high in 2023. Scammers are exploiting the digital landscape, capitalising on unsuspecting users who rely on mobile apps for their banking, payments and financial transactions. Metrics reveal that in 2023 alone, the UK has seen a 40% increase in reported cases of app fraud across traditional finance and crypto payments rails, resulting in losses exceeding £500 million. These alarming numbers underscore the urgent need for robust countermeasures.

New Initiatives to Combat APP Fraud

The Payment Systems Regulator, the UK regulatory body responsible for the oversight of payment services, is now taking steps to combat this phenomenon by making those firms who supply the payment rails through which these fraudulent transactions are executed liable for losses incurred by consumers. BCB Group welcomes this initiative and other such regulatory changes such as the new FCA Crypto Financial Promotions rules, which underpin the UK government’s strategic  aim of making the UK financial market place a safer place for consumers.

BCB Group’s Role

At BCB Group, not only do we strive to meet our own regulatory obligations but we will also endeavour to leverage our privileged position within the heart of the UK digital asset industry to champion a strong anti-fraud culture across our client base and the wider market. We work with our clients on how to maintain best in class anti-fraud controls across their businesses. The 3 critical areas of focus we most regularly discuss with our clients include:

  • The implementation of stronger authentication methods: Crypto exchanges  must adopt multi-factor authentication (MFA) techniques, such as biometrics and one-time passwords, to enhance user identity verification. This adds an additional layer of security, making it much harder for fraudsters to access accounts.
  • Continuous Monitoring and AI-Powered Analytics: Utilising artificial intelligence, machine learning and chain analytics crypto exchanges can analyse transaction data in real-time to detect unusual patterns or suspicious behaviour. This enables early detection and rapid response to potential fraud incidents.
  • Education and  Awareness: Crypto exchanges should actively educate their customers about app fraud risks and best practices. Through the use of risk banners and warnings Crypto exchanges can create friction in the customer journey focused on giving customers sufficient pause for thought before making investment/exchange decisions. By providing resources and guidance on safe app usage, customers can become more vigilant and less susceptible to scams.

The battle against APP Fraud within the crypto market place is real, the BCB Group Compliance and Financial Crime team is ready and willing to do whatever it takes to move the dial in fraud risk management to keep our markets safe. If you have any questions regarding anti-fraud strategies that can be readily implemented within a crypto exchange or other retail facing crypto asset service provider, please feel free to reach out to Tash Powell our Chief Compliance Officer – [email protected]

  • APP Fraud
  • compliance
  • crypto
  • crypto banking
  • crypto banking institutions
  • financial crime
  • institutional crypto markets
  • press coverage
  • Regulation
Natasha Powell, BCB team member
Written by
Natasha Powell

Formerly a European regulatory policy expert at the Financial Services Authority (the precursor to the Financial Conduct Authority) Natasha went on to spend 10 years in senior compliance roles in RBS, Schroders and Barclays Capital. Most recently Natasha led her own independent consultancy specialising in regulatory transformation and innovation and providing regulatory compliance and financial crime prevention management advice to European hedge funds, asset managers and prime brokerage firms. Natasha is responsible for managing the company’s global compliance and financial crime prevention governance framework.

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